Capital Market

Nigerian stocks strike N1tr deals in first half

Investors staked N1.004 trillion on Nigerian equities in the first half of the year, a marginal decline of 7.72 per cent from N1.088 trillion recorded in comparable period of 2019.

A breakdown of transactions on the Nigerian Stock Exchange (NSE) during the first half showed a major slowdown in the second quarter, which market analysts attributed to the disruptions caused by the COVID-19 pandemic.

Total transactions on equities dropped by about 40 per cent from N626.87 billion in first quarter to N376.7 billion in the second quarter. The market opened the year with total transaction of N235.46 billion in January 2020, dropped to N148.50 billion in February and picked up to N242.91 billion in March 2020.

With increased restrictions and suspension of floor-based trading at the NSE due to COVID-19 pandemic, turnover declined successively to N128.67 billion and N119.15 billion in April and May. Activities picked up to N128.88 billion in June 2020.

The Nation had reported that Nigerian equities recorded average loss of 8.80 per cent in the first half of 2020, equivalent to net capital depreciation of N1.14 trillion.

Benchmark indices at the NSE, which are generally regarded as sovereign equity indices for Nigeria, had shown that Nigerian equities swiveled through steep decline in first quarter and a major recovery in early months of the second quarter, closing the six-month period with net loss of N1.14 trillion.

The All Share Index (ASI)- a common value-based index that tracks all share prices at the Exchange, closed first half at 24,479.22 points as against 26,842.07 points recorded as opening index for the year.

The index had posted a double-digit negative return of 20.7 per cent in the first quarter, driven by a steep decline of 18.75 per cent in March. The six-month performance, though still negative, was moderated by the two-month successive rally in April and May, which saw equities recording a two-month average return of 19 per cent. The market relapsed in June with average decline of 3.12 per cent, a loss of about N410.8 billion.

With net loss of about N2.68 trillion in first quarter 2020, the half-year return, though negative, indicated considerable recovery within the second quarter. Nigerian equities recorded positive average return of 14.12 per cent in the second quarter, equivalent to net capital gains of N1.656 trillion for the three-month period. The ASI had closed March 2020 at 21,300.47 points.

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