Across the world, the impact of the novel coronavirus is still severe despite the ease of lockdown for economic reasons. The uncertainty continues to heighten and no economy is spared from the fall-out from the COVID-19 outbreak. Many African capital markets are bearish: Namibia, South Africa, Mauritius, Egypt, Morocco, Kenya, Ghana, Malawi and a few others.
In Nigeria, the first quarter of the year 2020 in terms of performance closed in the red with a negative return of (20.65 per cent), as against a negative return of (1.24 per cent) in the first quarter of 2019.
The market capitalisation of the Nigerian Stock Exchange, NSE, which represents the market value of all listed companies, lost about N2 trillion in the first quarter of 2020. However, surprisingly the performance of the stock market in April 2020 was positive.
The market performed with a gain of 8.08 per cent to close the month of April at 23,021.01 points, from an opening level of 21,300.47 points at the beginning of the month. In terms of market capitalisation for the period, the value was up by N896 billion as at April 30, 2020, from an opening value of N11.101 trillion on April 1, 2020, to close at N11.997 trillion.
In May 2020, the market on month-on-month performance closed at 9.76 per cent as against +8.08 per cent gain recorded in April 2020. The performance hinged higher due to investors bargain hunting even though most of the trades were executed remotely.
This surprising feat in Nigeria, particularly during the COVID19 pandemic, could be attributed to smart investors bargain hunting and the release of good end-of-the-year financial results by some of the listed companies, along with improved dividend declarations in recent time.
During this period some of the companies that released their financials were MTN Nigeria Communications Plc, Vitafoam Nigeria Plc, Dangote Cement Plc, Julius Berger Nigeria Plc, Nigerian Breweries Plc, Zenith Bank Plc, Transcorp Hotels Plc, United Bank for Africa Plc, Transnational Corporation of Nigeria Plc, Guaranty Trust Bank Plc, Stanbic IBTC Holdings Plc, Access Bank Plc, Fidelity Bank Plc, Sterling Bank Plc, Seplat Petroleum Development Company Plc, 11 Plc, Dangote Sugar Plc, BUA cement Plc Total Plc, Airtel Plc Nestle Nigeria Plc, First Bank, Okomu Oil Plc and BOC Gases Plc.
Nonetheless, the increasing number in the incidences of coronavirus in Nigeria has been a huge concern; it could signal weak economic data, declining productivity and falling consumption rate, which […]