The MTN Nigeria listing on the Nigerian Stock Exchange (NSE) lifted the market capitalization (cap) of equities market by N2.27 trillion in May.
The market opened in May at N10.96 trillion to close May 31, 2019 at N13.68 trillion while the NSE ASI appreciated by 6.55 per cent or basis points to 31,069.37 basis points from 29,159.74 basis points the market opened in May.
The telecoms giant on May 16 was admitted to the NSE premium board category, following its official listing by introduction of 20.35 billion units of ordinary shares valued at N1.8 trillion.
The Managing Direc-tor, Enterprise Stockbrokers Limited, Mr. Rotimi Fakayejo explained to our correspondent that the company’s listing impacted on market cap in May, stressing that market felt liquidity and other listed companies benefited.
According to him, “when there is a new listing on NSE, the market cap is expected to feel the impact but investors return might appreciate or depreciate which in the case of MTN Nigeria returns in May appreciated.”
The head of research, PanAfrican Capital Plc, Mr. Moses Ojo said, the new listing impacted on market appreciation in May.
Meanwhile, the equities market closed on a negative in its Year-till-Date performance, attributable to 2019 political uncertainty that led to foreign investors exiting the market in March.
The NSE All-Share Index (NSE ASI) dipped by 1.15 per cent or 361.13 basis points in Year-till-Date performance to 31,069.37 basis points from 31,430.50 basis points the market opened this year.
From the perspective of market capitalization (cap), the NSE equities market segment closed on a positive after gaining N1.95 trillion over MTN Nigeria listing in May.
The market cap, which is the market value of a publicly traded company’s outstanding stocks opened this year at N11.73 trillion, gaining N1.95 trillion to close May 31, 2019 at N13.68 trillion.
“Generally, the equities market closed negative in five months of 2019 but the new listing impacted on the market cap in May. When there is new listing, it does not affect the market ASI but affected the market cap. It simply means, in five months, average returns dropped but the listing lifted the market cap,” Ojo explained to our correspondent.
Speaking on the market performance in five months of 2019, Ojo said, the political uncertainty as at the result of the election affected the market.
“the elections led to foreign investors holding to observe what is happening while domestic investors were holdings. Throughout 2018 until we had elections, the market took a beat. We were not expecting much as a result of political uncertainty.”
The equities market in the first quarter(Q1) of this year started on a negative over domestic and foreign challenges.
Investors’ profit-taking in Oil & Gas and Consumers goods stocks listed on the NS down the equities market segment by N59 billion in Q1 of 2019.
Market cap had opened the year at N11.672 trillion and closed March 29, 2019 at N11.731 trillion, translating into N59 billion decline.
Despite the foreign and domestic challenges, investors profit-taking in above indices’ led to equities market decline in Q1 as other indices’ recorded marginal decline.
Findings by our correspondent revealed that investors profit-taking in the stocks of Seplat Petroleum Development Company Plc, and 11 Plc dragged the NSE Oil & Gas index to 290.52basis points in Q1 2019 from 302.23 basis points it opened for trading this year while the NSE consumers goods index dropped by 5.01 per cent to 711.29 basis points from 748.83 basis points it closed 2018.
Investigation by our correspondent revealed that stock price of Seplat Petroleum Development Company in Q1 2019 dropped to N590.00 from N640.00 the equities market opened for trading in 2019.
Commenting on the market outcome for June, Ojo predicated that the market might rebound in the second quarter of this year, on the heels of positive earnings from listed companies and stability in the nation’s economy.
Source: Nigerian NewsDirect
