Economy
Equity Market Ready for Recovery

By FSDH Research
There are indications that the Nigerian equity market is ready for a recovery in the year 2017 after three consecutive years of decline. The equity market, as measured by The Nigerian Stock Exchange All Share Index (NSEASI), depreciated by 16.14%, 17.36% and 6.17% in 2014, 2015 and 2016 respectively.
As at April 28, 2017 the NSEASI had lost 4.15% of its value. The major factors responsible for the poor performance of the equity market in the last three years are: weak macroeconomic performance, inconsistent policies, weak corporate earnings and portfolio realignment from equities to fixed income securities.
However, looking at the strong growth in the unaudited results that quoted companies released for the period January – March 2017 and the improvement in the macroeconomic environment, we believe the equity market is ready for a recovery in 2017.
As at April 27, 2017, 62 quoted companies had released their unaudited quarterly results for the period January – March 2017.
The total turnover of these companies increased by 41% from N1,450billion in 2016 to N2,042bilion in 2017.
The Profit Before Tax (PBT) increased by 45% from N257billion in 2016 to N373billion in 2017 while the Profit After Tax increased by 29% from N240billion in 2016 to N310billion in2017.
The recent increase in the crude oil price and production and subsequent increase in the external reserves have helped to stabilise the foreign exchange market – a major concern of the foreign investors. The increase in the supply of foreign exchange to meet the input requirements of manufacturing companies should increase their production activities and revenue in the current financial year.
The fiscal and the monetary authorities are implementing policies that should inspire investors’ confidence in the Nigerian economy and market.
Our survey shows that most investors did a lot of portfolio realignment -moving from equities to fixed income securities. The main reason for this was the lacklustre performance of equities in the face of attractive yields on fixed income securities.
The data from the National Pension Commission (PenCom) on the allocation of the Pension Fund Assets as at February 2017 shows that the weight of the pension fund assets on domestic equity dropped consistently from 2014 to 2017.
The weight stood at 13.7%, 10.4%, 8.6% and 7.5% in February 2014, 2015, 2016 and 2017 respectively. These figures are lower than PenCom’s approved pension fund assets allocation weight to equities, an indication that there is room for pension fund assets to allocate more funds to equities.
PenCom stipulates the maximum weights of equities in the investment portfolio of pension assets as follows: Fund I: 30%; Fund II: 25%, Fund III: 10% and Fund IV: 5%. Any pension contributor can make a formal request to join Fund I. Fund II is for active contributors who are below the age of 49 years. Fund III is for active contributors who are 50 years and above while Fund IV is strictly for retirees.
The analysis of the equity transactions on the NSE in the last three years shows investors’ apathy for equity investment.
According to the NSE, the value of equity transactions from foreign and domestic investors declined between 2014 and 2016.
Foreign transactions were N1.54trillion, N1.03trillion and N0.52trillion in 2014, 2015 and 2016 respectively while Domestic transactions were N1.14trillion, N0.88trillion and N0.63trillion in 2014, 2015 and 2016 respectively.
Although the relative size of foreign investors’ participation in the equity market declined between 2014 and 2016 (58%, 54% and 45% in 2014, 2015 and 2016 respectively), the share of foreign investors’ participation was higher than domestic investors’ participation between 2014 (Foreign: 58% and Domestic: 42%) and 2015 (Foreign: 54% and Domestic: 46%).
The foreign investors’ participation in 2016 at 46% was lower than domestic investors’ participation at 54%.
The uncertainties surrounding the foreign exchange policies and the difficulties to access foreign exchange to repatriate capital and profit led to the withdrawal of foreign investors from the market. The stability in the macroeconomic environment and the strong earnings of quoted companies should attract the needed liquidity into the market. Consequently, the equity market should record a strong recovery in the year 2017.
Source: FSDH Research
Economy
BNB Price Reflects Changing Dynamics in the Digital Asset Market
Economy
NASD Unlisted Security Index Crosses 4,000-point Benchmark Again
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange achieved a milestone on Friday, April 24, 2026, after five securities on the platform helped with a 1.85 per cent growth.
Data showed that the NASD Unlisted Security Index (NSI) again crossed the 4,000-point benchmark yesterday.
The index chalked up 73.64 points during the trading day to close at 4,052.59 points compared with the preceding session’s 3,978.95 points, while the market capitalisation added N5.38 billion to finish at N2.424 trillion versus Thursday’s closing value of N2.380 trillion.
The price gainers were led by Okitipupa Plc, which grew by N25.00 to sell at N305.00 per share compared with the previous price of N280.00 per share. Central Securities Clearing System (CSCS) Plc gained N6.92 to close at N76.26 per unit versus N69.34 per unit, Afriland Properties Plc appreciated by N1.00 to N17.00 per share from N18.00 per share, FrieslandCampina Wamco Nigeria Plc improved by 55 Kobo to N99.55 per unit from N99.00 per unit, and Food Concepts Plc increased by 5 Kobo to N2.70 per share from N2.65 per share.
However, there was a price loser, MRS Oil, which dipped by N21.75 to N195.75 per unit from N217.50 per unit.
During the final session of the week, the value of securities jumped 75.2 per cent to N41.3 million from N23.6 million units, and the number of deals expanded by 62.9 per cent to 44 deals from 27 deals, while the volume of securities declined marginally by 0.9 per cent to 447,403 units from 451,522 units.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by volume (year-to-date) with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
GNI was also the most active stock by value (year-to-date) with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 59.6 million units transacted for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Economy
Naira Slips to N1,358/$1 as FX Reserves, Policy Uncertainty Concerns
By Adedapo Adesanya
It was not a good day for the Nigerian Naira in the currency market on Friday, April 24, as its value depreciated against the major foreign currencies at the close of transactions.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), it lost N4.53 or 0.33 per cent against the United States Dollar yesterday to trade at N1,358.44/$1, in contrast to the N1,353.91/$1 it was exchanged on Thursday.
Equally, the domestic currency slipped against the Pound Sterling in the official market during the session by N8.14 to close at N1,834.02/£1, compared with the previous rate of N1,825.88/£1 and dropped N8.01 against the Euro to sell at N1,590.73/€1 versus N1,582.72/€1.
Also, the Naira depreciated against the US Dollar at the GTBank FX desk on Friday by N4 to quote at N1,370/$1 compared with the previous session’s N1,366/$1, and at the parallel market, it depleted by N5 to settle at N1,380/$1 versus the preceding day’s N1,375/$1.
Data published by the Central Bank of Nigeria (CBN) indicated that NFEM interbank turnover surged to N43.562 million across 68 deals, up from N28.117 million the previous day.
Despite the CBN’s reassurance that the recent drop in external reserves is not worrisome, the market remains unsettled by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market as gross reserves continue to decline to $48.4 billion.
The outlook for the Dollar appears supported by broader macro risks, including elevated oil prices tied to the tanker traffic disruptions in the Strait of Hormuz and a continued US-Iran standoff over ceasefire negotiations.
A look at the digital currency market showed that investors are sitting on the edge as the US Dollar rebounded amid geopolitical and inflation risks despite continued inflows into US spot bitcoin Exchange Traded Funds (ETFs).
Solana (SOL) rose by 1.2 per cent to sell $86.45, Cardano (ADA) appreciated by 1.1 per cent to $0.2517, Dogecoin (DOGE) grew by 0.9 per cent to $0.0989, Ripple (XRP) improved by 0.3 per cent to $1.43, Ethereum (ETH) soared by 0.2 per cent to $2,316.83, and Binance Coin (BNB) chalked up 0.1 per cent to sell for $637.44.
However, TRON (TRX) depreciated by 1.3 per cent to $0.3235, and Bitcoin (BTC) lost 0.2 per cent to close at $77,562.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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