September 13 2018

N6.2 trillion worth of equities traded on the NSE in last 5 years

Source: Nairametrics

Data from the Central Bank of Nigeria (CBN) annual report for 2017, show that equities have dominated transactions on the Nigerian Stock Exchange (NSE) in the last half-decade.

Here are key highlights from the report:

The volume of securities traded

Equities accounted for 99.3% of the 656 billion securities that were traded on the NSE between 2013 and 2017.

The markets are, however, far from the peak of the last 5 years as the total number of stocks traded from 2015 to 2017 were nearly equivalent to the volume traded in 2013. 267 billion stocks were traded in 2013. 93.6 billion shares were traded in 2015, 95.8 billion in 2016 and 93.2 billion in 2017.

Number of deals

7,108,046 deals took place on the NSE between 2013 and 2017. 2013 had the highest number of transactions in the last five years at 3,224,639 deals. 2016 was the year with the least number of transactions at 837,421 deals.

Equities again dominated activities on the NSE, accounting for 99.9% of the transactions.

Value of securities traded

A total of N6.2 trillion worth of securities have been traded in the last 5 years, with equities taking the lion share. 2013 recorded the highest value with N2.3 trillion worth of equities traded. 2016 had the least value with N576 billion worth of securities traded.

How has the market fared in the last half a decade?

From a high of 41,329.19 basis points in 2013, the All-Share Index dipped to 26,847.72 in 2016 before recovering to 38,243.19 basis points in 2017.

Why were 2015 and 2016 lean years?

2015 saw the economy slipping into a recession, for the first time in nearly three decades. The drop in crude oil prices and production volumes led to a foreign exchange crisis. This, in turn, led the Central Bank of Nigeria (CBN) to place supply control measures. Foreign investors, who are dominant players on the NSE, then exited the markets.

A devaluation of the Naira and improved oil revenues led the apex bank to relax the controls and gave foreign portfolio investors the needed confidence to enter the market.

How will 2018 fare?

Barely four months to the end of the year, and 2018 numbers may not beat the performance of 2017. The All Share Index is currently at 32,292.79 basis points, 15.56% lower than last year’s closing figure of 38,243.19 basis points.

While oil prices remain stable, approaching elections and a crisis in emerging markets have led to foreign investors exiting the capital market.