…World markets tumble again as losses hit $4 trillion in 8 days***
The Nigerian Stock Exchange (NSE) recorded a turnover of N197. 22 billion on 21.71 billion shares transacted in 168,649 deals in January 2018, amid increased confidence.
The turnover and volume grew by 313.46 per cent and 167.36 per cent respectively when compared with figures achieved in January 2017.
The market posted a turnover of N47.7 billion on 8.12 billion shares in 61,515 deals for the month of January 2017.
Data obtained from NSE indicates that the financial services sector was the most active in volume terms, with a total of 13.09 billion shares worth N107.96 billion in 106,466 deals.
It was trailed by conglomerates with a turnover of 6.63 billion shares valued at N16.54 billion exchanged in 10, 541deals.
Consumer Goods came third with a total of 1.07 billion shares worth N52.05 billion transacted in 27,854 deals
The Oil & Gas sector sold 395.79 million shares valued at N5.19 billion traded in 7,483 deals.
Also, investors net worth on the exchange surged by 15.95 per cent during the period under review due to increased activities ahead of 2018 earnings season.
The All-Share Index, which opened for the year at 38,243.19 inched 6100.46 points or 15.95 per cent to close at 44,343.65 on Jan. 31, 2018.
The market value or capitalisation rose by N2. 29 trillion or 16.79 per cent to close at N15.895 trillion when compared with N13.609 trillion recorded at the beginning of the month.
Reacting to the massive growth posted by the market, Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said that stock market performance in January was remarkable.
Uwaleke attributed the 15 per cent growth to increased investors confidence in the economy, especially from foreign investors who were excited by the uptrend in international crude oil price.
He said that the bullish trend in the stock market would most likely continue in the month of February barring any external shock from the oil sector which drives the economy.
Uche said that the delay in the passage of the budget could present a drag on the stock market performance in February.
Mr Sewa Wusu, Head Research, SCM Capital Ltd., said the market commenced and finished of January on a very positive note, hinged on the prevalent and strong macroeconomic condition coupled with high expectations of dividends benefit.
Wusu said the accretion to the country’s external reserves which led to stable foreign exchange condition were some of the basic themes that shaped investors sentiments to the upside during the review period.
He said that investors demonstrated strong interest in both the tier 1 and tier 2 banks.
“The consumer goods space also enjoyed significant rally on their share prices in January.’’
On market outlook, we are optimistic that the current rally would continue ahead of the earnings seasons,’’ Wusu said.
He said that the market might still witness intermittent profit booking before the release of results.
Wusu, however, said that outlook remained strong and positive in the current month.
The analyst said that the strategy to be adopted by risk tolerant investors ahead of the earnings seasons was to sell during the rally and buy back later.
“This will ensure that sure smart money investors optimise their return,’’ Wusu added.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd. , said that the 2017 bull-market on the exchange extended to the first month 2018, defying what had come to be known and accepted as the “January effects.
Omordion said that “January effects’’ a coinage that resulted from the fact that the month had repeatedly closed in red as investors were believed to besiege the market for funds to settle pressing demands after the December spending spree.
In the meantime, World stock markets nosedived for a fourth day running on Tuesday, having seen $4 trillion wiped off from what just eight days ago had been record high values.
Europe’s main markets started down as much as 3 percent and shares tumbled in Asia after a wild day for U.S. markets.
Two days of steep losses have erased the U.S. market’s gains from the start of this year, ending a spate of record-setting calm for stocks.
The Dow Jones industrial average closed down 1,175 points on Monday, as the market bet on more interest rate hikes, the same day that a new Federal Reserve chairman was sworn in.
On Tuesday, Taiwan’s main index lost 5.0 percent, its biggest since in 2011 and Hong Kong’s Hang Seng Index dropped 4.2 percent. Japan’s Nikkei dived 4.7 percent, its worst fall since November 2016, to four-month lows. Australia’s benchmark S&P ASX 200 slid 3.4 percent, South Korea’s Kospi declined 2.4 percent and the Shanghai Composite index was off 2.2 percent.
Monday’s selling spree also occurred the same day that Jerome Powell was sworn in as chairman of the Fed, which is in charge of setting the potentially higher interest rates that are driving the sell-off.
The Dow recovered after briefly dropping 1,500 points, the largest intraday drop in the index’s history, to break below the psychologically important level of 25,000.
But the overall pullback was only 4.6 percent, not record-setting on a percentage-wise basis. The S&P 500 would have to drop 7 percent or more to trigger a halt in trading, and it would have to drop 10 percent or more to be considered a “correction.”
Still, the plunge had markets heading to their lowest close of the year, and it followed a dip on Friday, which itself was the sixth-largest point drop in the Dow’s history.
On Sunday, the central bank’s departing leader sounded a note of caution on stock prices.
“It is a source of some concern that asset valuations are so high,” outgoing Fed chair Janet Yellen told CBS News, highlighting price-earnings ratios in equities.
Now, as Powell takes the reins, he and the rest of the Fed Board of Governors will have to determine if that long-running trend is starting to reverse — and how to respond.
“Everybody knew this was coming — stocks are close to record valuations and it was a matter of when it was going to happen, not if,” said Dan North, chief economist at Euler Hermes North America. “I would expect that at this point, it’s probably sentiment-driven and we’ll get a rebound.”
After the market’s big gains in 2017 and early 2018, stocks were overdue for a drop, said David Kelly, the chief global strategist for JPMorgan Asset Management.
“It’s like a kid at a child’s party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge,” Kelly said.
“Since last autumn, investors had been betting on the ‘Goldilocks’ economy”
Market observers debated whether this was reflective of a short-term breather for a meteorically rising market, or the harbinger of a more broad-based correction. The appearance of higher wage growth in Friday’s jobs report was good news from a Main Street economic growth standpoint, but it spooked Wall Street as investors pondered whether this would give the Fed more incentive to raise interest rates at a quicker pace.
Under Yellen, the Fed had set a course for three interest rate hikes in 2018. Economists debated whether this would be too much, or too little — a question with higher stakes in light of the market’s dramatic movements over the last two days.
“There’s a lingering fear of inflation at the Fed that may cause the Fed to tighten in anticipation of further improvement we might never see,” said Lindsey Piegza, chief economist and managing director at Stifel Fixed Income.
Additional report from NBC
