By Goddy Egene
The Nigerian stock market has rewarded investors with the best returns in the first month of January 2013, dwarfing all other stock markets globally, THISDAY checks have revealed.
The market performance, measured by the Nigerian Stock Exchange (NSE) All-Share Index, showed a growth of 13.4 per cent to occupy the number position. Nigeria closed last year as the third most rewarding bourse, behind Egypt and Kenya.
However, sustained investors positive sentiments, buoyed by confidence in the financial reforms in the market and high expectations of impressive 2012 corporate actions, have lifted the Nigerian stock market above other developed and emerging markets.
Kenya, which posted the best growth last year, placed second in the first month of this year behind Nigeria with 8.3 per cent. Mauritius returned 4.1 per cent, while South Africa and Egypt ended the month with 2.8 per cent and 2.6 per cent respectively.
Outside Africa, Japan posted the best return with 7.2 per cent, followed by United Kingdom with a growth of 6.3 per cent. United States returned 6.2 per cent, just as China ended the month with a growth of 4.7 per cent. France and Germany accounted for 2.3 per cent and 2.1 per cent respectively.
A further analysis of the Nigerian market in the first month of 2013 showed that while it recorded an aggregate growth of 13.4 per cent, investors in some equities enjoyed returns of over 100 per cent.
For instance, Eterna Oil Plc fetched investors 145 per cent, followed by Forte Oil Plc with 116 per cent. Cement Company of Northern Nigeria Plc rose by 93 per cent, while Julius Berger Nigeria Plc followed closely with 92 per cent rise.
Others among the top 10 best performing stocks included: Academy Press Plc (74per cent);Livestock Feeds (73 per cent); WAPIC Insurance Plc (69 per cent);Sterling Bank Plc (67 per cent); Wema Bank Plc (65 per cent); and Presco Plc (53 per cent).
Market analysts had, at the beginning of the year, projected that the rally in the Nigerian market would continue into the New Year.
The Managing Director/Chief Executive Officer of the Partnership Investment Company Plc, Mr. Victor Ogiemwonyi, had said the outlook for the market in 2013 was very positive.
“I expect the market to do better than average in the New Year. The factors that will influence things include the rising confidence and the liquidity, which will follow, especially with the year starting with an approved budget. The gradual return of investors will see the market rise in the first quarter and slowly correct any spike that may be too far from the average,” he said.
Also speaking, the Chief Executive Officer of Quest Advisory Services Limited, Mr. Bayo Rotimi, said the upswing recorded in 2012 could be sustained in 2013 through the continuation of the on-going reforms and the faithful implementation of the capital markets reform roadmap.
“The introduction of new products will help deepen and broaden the markets and ensure continued inflow of funds into the capital markets. New listings especially by telecoms, power, transportation and other infrastructure companies would undoubtedly boost market performance in
coming years. Enhanced market liquidity through the injection of long-term funds arising from the review of the investment guidelines by Pension Fund Administrators, the Sovereign Wealth Fund and the ongoing reforms in the
insurance industry will also help,” Rotimi said.