By Chinwendu Obienyi
Despite bearish dominance, Nigeria’s stock market still topped Africa’s best performing market chart, beating the likes of Uganda, Egypt, Ghana, Kenya and two other countries, an Afrinvest report has revealed. The domestic bourse sustained its descent for the fifth consecutive week. Although bargain hunting activities briefly tempered the downtrend midweek, continued profit-taking activities on tier-1 banking stocks drove the market lower, with the All-Share Index (ASI) settling below the 100,000-points mark, closing at 99,539.75 points.
Notably, sustained sell pressures on GTCO (-19.1 per cent), Zenith Bank (-11.3 per cent), UBA (-13.7 per cent), FBNH (-10.3 per cent) and AccessCorp (-11.9 per cent) resulted in a 2.7 per cent week-on-week (w/w) decline in the market’s index, with the value of listed equities- market capitalisation dropping by about N1.57 trillion to close at N56.30 trillion.
As a result, the market’s Month-to-Date (MtD) and Year-to-Date (YtD) returns settled at -4.8 per cent and +33.12 per cent, respectively. However, a weekly assessment of global markets, particularly on the African continent showed that Nigeria is still one of the best performing stock markets on the globe. According to the report which was seen by Daily Sun, Nigeria ranked as number one in year-to-date returns terms, which stood at +33.12 per cent. Uganda stood at +19.20 per cent while Egypt, despite currently going through political uncertainties and currency fluctuations, stood in third place at +13.8 per cent.
Kenya, which recorded one of the worst debt values, stood in fourth place, at +12.5 per cent. Others include Ghana (+11.9 per cent), Morocco (+11.5 per cent) and Mauritius (+5.6 per cent).
Analysts who spoke to Daily Sun, stated that the development could be attributed to the Central Bank of Nigeria (CBN)’s ongoing short-term reforms to tame rising inflation and create stability in the country’s FX market.
They however noted that while Nigeria’s stock market has shown resilience compared to its African counterparts, it has not been immune to the challenges affecting global markets.
Factors such as oil price volatility, foreign exchange pressures, and domestic economic policies have continued to influence investor sentiment. There is also a likelihood that bearish dominance could continue this week on the trading floor following the recent announcement regarding the suspension of the Dangote Foods merger and ongoing reactions to the recapitalisation exercise in the banking sector.
Head, Research, FSL Securities, Victor Chiazor, said, “Nigeria’s market still offers opportunities for investors, especially with its large and diverse economy. The country’s efforts to diversify its economy away from oil dependence, improve its business environment and the ongoing CBN reforms has the potential to attract more investments in the future. Hence, I am not surprised with the report.
While Nigeria’s stock market has faced its share of challenges amid bearish dominance, it remains one of the most promising markets in Africa. But in the short-medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and corporate actions”.