The Nigerian Stock market gained by 2.4 percent in November against the 4.9 percent decline it suffered in October.
This follows the Central Bank of Nigeria (CBN) October’s directive that restricted local investors –individuals and corporate organisations– from investing in Open Market Operation (OMO).
The market, which dipped by N642 billion in October, gained a total of N204 billion in November.
Also, the NSE All-Share Index (ASI) appreciated from 26,355.35 to 27,002.15, market capitalisation rose from N12.829 trillion to N13.033 trillion.
Market operators and other stakeholders attributed the rebound recorded in the market to renewed demand for stocks as some investors shifted focus from fixed income securities following the central bank’s policy.
Also, there was significant bargain hunting in the month under review as investors took advantage of the attractive valuations as many of the equities dipped to a two-year low.
Ayo Oguntayo, a stockbroker said the performance of the market in November reflected how a positive pronouncement could easily impact the fortunes of the equities market.
“You can see how the CBN’s policy on OMO, which drove down the yields on fixed income securities, attracted patronage to the equities market.
“The stock market has potential to handsomely reward investors who are not risk averse. Last week alone, for instance, some stocks recorded capital appreciation of between 11 per cent and 30 per cent,” Oguntayo said.
The Managing Director/CEO of Network Capital Limited, Oluropo Dada, recently said the market, more than ever before, presented an overwhelming buy opportunity for investors in the face of the attractive valuations and CBN’s OMO policy.
“The market fundamentals, despite the persistent illiquidity, are still very strong and prices of quoted securities can only go up, which will be triggered by both arbitrage income and dividend income. Based on the third quarter results being released by the quoted companies, especially the banks, the market is where to be now,” Dada said.