Investors and other stakeholders could not have had a better yield than they are presently enjoying in the stock market, following the return to the full grip of the bulls on the market from the bearish era after a long spell of lull. Many investors lost hope following the global financial meltdown which ravaged economies across the world in 2008, and Nigeria not immune, as the downturn wiped off almost 70 per centof the value of the market. Since then, the market has been struggling to recover. However, investors began to have hopes rekindled when the market began to bounce back. In the second half of 2012, the market recorded a record growth of 34.5 per cent. The market began the upward swing precisely afterthe President of the Nigerian Stock Exchange (NSE), Aliko Dangote, resumed office on June 19, 2012 after an interregnum. Dangote, a former Vice President of the Exchange, had been elected the President. He had barely assumed office when his election became a subject of judicial dispute. He was however returned to the office after 22 months following the ruling of the Court of Appeal. His resumption, stakeholders claimed, opened a new vista in the life of the market which hitherto had been comatose. Prior to his assumption of duties, the implementation ofgovernment policy on fuel subsidy in January of 2012 had stalled economic activities at the beginning of the first quarter, the result ofwhich was felt in the capital market through the first half of the year. However, there was more excitement in the second halfof the year with steady growth across most sectors, and the inclusion of selected government bonds in the JP Morgan Government Bond Index-Emerging Markets (GBI-EM). Consequently, international institutional investors flocked to the bondmarket, while local institutional investor” appetite for equities was reawakened. After a superlative growth of 74.7 per cent in 2007, the market dipped by 45.7 per cent in 2008, 33.7 per cent in2009. It recovered by 18.9 per cent 2010 before falling again by 16.3 per cent in 2011. Towards the end of 2012, the market growth, measured by the NSE. All-Share Index (ASI) was already over 33 per cent. ThePresident of the Chartered Institute of Stockbrokers (CIS), Mr. Ariyo Olushekun, assured that there was no likelihood of any major negative development in the market that could reverse this performance and make the market to close negatively in the year. Given the efforts of regulators aimed at repositioning the entire financial system and the capital market in particular, market analysts were optimistic that a positive growth would be recorded this year; however, they never expected the magnitude of growth that was about to manifest. In thebeginning of 2012, analysts from three leading investment banking firms, FSDH Securities Limited, Meristem Securities Limited (MSL) and FBN Capital Limited,projected a growth of below 15 per cent for the year. For instance, analysts at FSDHSecurities Limited projected that the market would close at 13.3 per cent. Those at MSL envisaged 13.5 per cent while FBN Capital Limited projected a growth of 14 percent. In projecting the robustoutlook for 2012, analyst at MSL said their bullish sentiments were driven by expected performance of thefinancial service (majorly banks) sector of the market among others. Meanwhile, asat last week, the quantum leap in the performance of the market was beyond theirexpectation. Most investors and other stakeholders are of the view that the business acumen, good leadership qualities and international contacts of the Exchange President combined have impacted positively on the stock market which grew by 77 per cent in capitalization within one year of his return to NSE. In the last one year, capitalization of the NSE has soared by N5.202 trillion, while the Exchange, All-Share Index rose by 76 per cent. Specifically, the market capitalization rose from N6.712 trillion to N11.914 trillion by the close of trading on Monday. In the same vein, the ASI grew from21,028.39 to close at 37,085.11 Market analysts and operators said the leadershipof Dangote has created harmony in the Council and good atmosphere for the management of the Exchange to implement strategies which have taken the market to the new levels. Dangote had last year, promised to support the management and work with all council members to ensure restoration of investors confidence. He, pledged that during his tenure as NSE president, he would be guided by five key elements: Transparency and improved governance of the market; improving the liquidity, turn-over and size of the market; enhancing market efficiency by ensuring clearer and updated rules, processes andprocedures; provision of world-class infrastructure and technology for our market and massive capacity building and rapid skill enhancement of the staff of the stock exchange and investor education.
Posted on: Sat, 22 Jun 2013 21:31:43 +0000
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