The capital market rides the bulls in 2020. Through the roughshod of the global crude oil slump, COVID-19 pandemic, tough macroeconomics and domestic recessions marked with galloping prices and unrests, the capital market shows reverent resilience and fills the gaps with positives in a year marked with global and national anxieties. Deputy Group Business Editor/Capital Market Editor, Taofik Salako , reports
Nigerian equities closed weekend with net capital gain of N1.04 trillion for the week.The benchmark index showed average gain of 5.42 per cent for the week. This pushed the average year-to-date return so far in 2020 to 44.55 per cent, ahead of 42.3 per cent in 2017.
When adjusted on the basis of the benchmark index, the average return of 44.55 per cent implies net capital gain of N5.77 trillion so far in 2020. As it was in 2017 when Nigerian equities’ return led the comparative global equities’ returns, most indicators point to another world-leading return in the year, with expectations that a symbolic Santa Claus rally will push the benchmark index higher.
Santa Claus rally is the tendency for stock prices to go up in the last week of the year mostly in anticipation of expected positioning for dividends by the first month of the New Year.
With a quarter-to-date return of 27.09 per cent and month-to-date return of 10.72 per cent, the Nigerian stock market has defied the cash squeeze associated with economic recession, benefitting from the rate crash at the fixed-income market.
World-ranking return
Through the lockdowns and disruptions occasioned by COVID-19 pandemic, and later the unrests due to protests against police highhandedness, the stock market braved the odds of hyperinflation and economic recession to sustain and build up attractive return since the second quarter. While a steep decline of 18.75 per cent in March 2020 had driven the first quarter to a negative return of -20.7 per cent or net loss of N2.68 trillion, the market recovered in the second quarter with positive average return of 14.12 per cent or net capital gains of N1.656 trillion. It continued its rally with average return of 9.61 per cent or net capital gains of N1.23 trillion in third quarter 2020.
The All Share Index (ASI)- the common value-based benchmark index that tracks all share prices at the Nigerian Stock Exchange (NSE), closed weekend at 38,800.01 points. It had opened the year at 26,842.07 points. Aggregate market value of […]
