Stock market investment sentiment softens to 0.06%
Investors in the Nigerian stock market has soften their sentiment in the bourse with a capital gains of 0.06 percent, down from 5.2 per cent recorded previous day.
The strong market sentiment had lead to over N1.5 trillion gains on Tuesday, a day after the inauguration of the new government of President Bola Tinubu who had eliminated subsidy while indicating a strong economic reform in his inauguration speech.
But yesterday’s gain which was moderate at N17 billion, brought total gains in the month of May to N1.833 trillion, up by about 6.24 percent against April position.
Yesterday’s moderate gains was driven by a sustained demand for MTN Communication Nigeria (+0.40%), BUA Foods (+5.61%) and Geregu Power (+1.68%), which offset losses in tier-1 banking stocks including Zenith Bank Plc (-2.36%), Guaranty Trust Bank (-2.38%) and Access Corporation (-0.40%).
Consequently, the Month-on-Month (MoM) returns increased to 6.24 percent
Though the market has been fluctuating in the last four weeks of the month, economic plans put out by the newly inaugurated administration of President Bola Ahmed Tinubu to boost Nigeria’s struggling economy significantly lifted market activities, resulting in the month-end rally witnessed in the last two trading days of the month.
Specifically, the benchmark performance measurement indicator – the All Share Index (ASI), rose to 55,769.28 points at the end of May from 52,403.51 points at the beginning of the month, indicating a 6.24 percent increase.
Also, the market capitalisation of all listed equities jumped to N30.367 trillion at the end of the month from its opening figure of N28.534 trillion.
Sectoral performance was upbeat as all the five major sectors advanced during the month led b y the banking sector, which appreciated by 19.5 percent. This was followed by the oil & gas sector that rose by 18.7 percent and consumer goods sector with 15.2 percent increase. The insurance and the industrial goods sectors were also up 13.4 percent and 1.8 percent respectively.
Tinubu had promised at his swearing-in on Monday to expand the economy by at least 6 percent a year, lift barriers to investment, create jobs and unify the exchange rate, while also tackling rampant insecurity.
He also announced the end of the nation’s N400 billion fuel subsidy programme to ease pressure on government finances, saying that savings from the subsidy would be used to fund education and health projects.
He also emphasized the need for a unified exchange rate and a reduction in interest rates to drive up investment, thereby leading to the month-end rally in the equities market.