The Nigerian stock market closed the first half of the year with a growth of 3.3 per cent compared with a decline of 3.2 per cent in the corresponding period of 2015. Although the market ended on a bearish noted yesterday, in all, it recorded a growth at the end of first six months of the year. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) closed at 29,597.79 on the last day of June, up from 28,642.25 at which it opened 2016.
Market capitalisation added N314 billion, rising from N9.851 billion to close at N10.165 trillion yesterday. Analysts said but for the rebound the market recorded recently following positive reactions to the new flexible foreign exchange policy of the Central Bank of Nigeria (CBN), the market would have ended the first half on negative note just last like last year.
After a bearish trend caused by policy flip flops, exchange rate uncertainty and budget delay, the market rebounded two weeks back following the new forex, policy bringing the year-to-date(YTD) growth to the positive territory.
Reacting to the development then, analysts at InvestmentOne Limited had said: “In the immediate, while we expect the ongoing optimism regarding a possible shift to a market-determined exchange rate regime to support market performance. We see the impacts of these events on market performance. However, in the medium to longer term, we see improved performance on the back of efficiency gains from an expansionary fiscal policy leading to improvement in aggregate demand.”
However, profit taking set in reducing the YTD growth to 3.3 per cent yesterday.
The market closed with a decline of 0.7 per cent yesterday depressed mostly by Ecobank Transnational Incorpodated (-3.09 per cent), Seplat Petroleum Development Company Plc( (-2.94 per cent), FBN Holdings Plc (-2.51 per cent), United Bank for Africa Plc(-2.08 per cent); Forte Oil (-1.90 per cent); Zenith Bank (-1.44 per cent); Nigerian Breweries (-1.44 per cent), Dangote Cement (-1.03 per cent)c among others.
According to analyst at Dunn Loren Merrifield, “the current market trend suggests that, optimism that the new CBN FX policy would bring relief to the market particularly on banking stocks is beginning to fade as investor remains sceptical about the policy sustainability and transparency.”