Q3’22:Equity Investors Made N4.15trn Profit, Lose N324bn In September

In the past nine months, investors in Nigeria’s stock market have made almost N4.15 trillion, despite the country’s 20.52% inflation rate.

On a monthly basis, the investors, however, lost more than N324 billion in the month of September 2022 as a result of sell-off pressure brought on by an increase in the MPR, rising inflation, market pessimism, and other macroeconomic headwinds.

The NGX All Share Index, or ASI, which measures the equity market, fell by 1.6% or 812.05 points from its close in August to 49,836.21 points in September.

The market capitalization, which measures the value of assets on the Exchange, increased to N26.451 trillion from N22.296 trillion opening figure on the first trading day in 2022, according to information available from the Nigerian Exchange Limited, or NGX, at the close of trading on Friday.

The ASI, which gauges the performance of the overall market, increased 14.8%. Year-to-Date (YtD), up from 42,716.24 points at the start of the year, is 49,836.51 points.

As the ASI closed unchanged at 49,024.16 points, trading last week showed that cautious trading ruled the local bourse. However, losses in Tier-1 banking stocks and a 10.0% decline in Nestle Nigeria’s closing limit down hampered the market’s performance.

“Considering the outcome of the Monetary Policy Committee, MPC meeting, we believe the Cash Reserve Ratio, CRR hike would drag the banks’ profitability, as downward pressure on net interest margins (NIM) would inhibit earnings growth and may further limit investors’ interest in banking stocks. “Overall, we expect the local bourse to maintain cautious trading sentiments as electioneering activities kick off in full gear.

“However, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings.”Analysts at Cordros Research responded