The Nigerian stock market on Thursday gained marginally to resume trading for 2020 with one of its best starts to a year since 2013.
The main equity gauge gained 0.10 percent on the first trading day of the New Year after the market lost almost 15 percent in 2019.
The gain on Thursday is one of the few instances the market has closed in the green on the first trading day of a new year in the last eight years at least. A 1.5 percent gain in 2013 is the strongest advancement in the period.
Blue-chip stock MTN Nigeria gained 3.81 percent in its first trading session although the highest price gain was a maximum 10 percent upswing in Royal Exchange to close at 33 kobo per share.
Cornerstone gained 8.89 percent to 49 kobo while Courteville Business Solution shares rose 8.7 percent. Transcorp gained 8.08 percent while Vitafoam moved up by 6.82 percent following a brilliant earnings result for 2019 business year.
On the other hand, Seplat started the year on a poor footing after it shed 9.99 percent to N592.10 leading the laggards.
Glaxosmithkline lost 9.84 percent, Wapco lost 9.8 percent, Fidson shed 9.68 percent while Wema Bank declined 8.11 percent in the day’s trade.
Analysts say the stock market, which has suffered double-digit decline for two straight years might see a bit of a relief in 2020, although there is no guarantee for a positive year’s return in sight.
However, analysts at Lagos-based CSL Stockbrokers say eyes would be on corporate performance of the real sectors amid hopes for a better GDP reading in 2020.
“I think what investors would like to see going into 2020 is a faster expansion in the economy which would reflect in the performance of real sector like the consumer goods industry,” said Gbolahan Ologunro, analysts at Lagos-based CSL Stockbrokers. “Generally looking at the year, I don’t think the outlook looks so rosy.”
Ologunro says external weaknesses seen in depleting foreign exchange reserves and pressure on the naira was causing investors to pile funds into risk-free assets while some FPIs are repatriating funds “due to growing concerns about the local currency (naira).”
The market last year suffered largely due to perceived macro-economic constraints on businesses amid an uncertain and vague policy environment.
Experts say coordinated and coherent policies are necessary for boosting investor confidence in the Nigerian economy this year.
