2022 begins and many investors in the Nigerian bourse are wearing looks of optimism as the new year continues to unfold.
While some may have counted their gains, others may, of course, not have recouped as much as they would have loved from their investments.
It would be noted that equities market investors earned N1.240 trillion as the market capitalisation for the period settled at N22.297 trillion, up from the N21.057 trillion it recorded at the beginning of the year.
Performance across the major sectoral indices was also positive during the period with the NGX Oil & Gas index leading with 52.52 per cent gain. NGX Premium index followed with a gain of 20.08 per cent, while NGX Pension index up by 16.96 per cent.
NGX Lotus II, NGX 30, NGX Insurance, NGX Banking and NGX Consumer Goods indices closed the year in a positive territory with a gain of 5.74 per cent, 5.01 per cent, 4.54 per cent, 3.32 per cent and 2.78 per cent, respectively.
On the other hand, NGX Industrial Goods index declined by 2.15 per cent in the period under review.
Nigerian Stocks had also started 2021 on the back of an impressive 50.03% return as local investors staged a remarkable surge in demand for equities.
Analysts noted that stocks have struggled since 2021 as demand from local investors cooled amidst little to no interest from foreign investors, higher inflation, a shift in central bank monetary policies, and slow economic growth.
According to FSDH Research analysts said,
“The equity market in 2021 rode on the appreciation of the Oil & Gas Index on the back of the sustained increase in oil prices. The short-term outlook for the global oil market is challenged with the spread of the COVID-19 Omicron variant.
This is expected to negatively impact the performance of the Oil & Gas segment of the NGX.
“At the firm level, many large-cap companies listed on the exchange are reporting record performance in their 2021-9M reports, which will spill into their full-year performance and eventual dividend payment. Hence, it will drive positive sentiment towards the equity market in 2022,” FSDH Research analysts also said.
Whereas expectations have moved to 2022 as no one can predict with certainty the performance of the market in future.
But analysts can hazard or conjecture performance by looking at However, the market has opened in a positive note. Already, the market has gained 3.6% in the past 13 days as NGX ASI rose from 43,026.23 basis points in January 2022 to 44,604.74 points on January 13, 2022.
That is a good start with a seeming air of optimism. But there is apprehension given that the macro-economic environment in which the market could only achieve gains of 6.07% in 2021 are still pervasive in the beginning of 2022.
The market trend in 2022 will take its bearing from all that had taken place in 2021. Though closed in the positive by about 6%,this is a far cry from the wonderful performance which made it attain 50 percent gain at the close of business on December 31, 2020. A more realistic performance at 6% but there are no clear compass that there will be a boom in 2022. Unfortunately, the third or fourth wave of the ravaging pandemic is becoming stronger and spreading very fast in Nigeria. Many analysts have said that emerging markets sometimes are not driven by fundamentals.
It would be recall that in the corresponding period of 2008, the market maintained a bullish disposition and investors smiled to the banks.The major indicators attained unprecedented heights.
The market capitalization peaked at about 13.1trillion and the All share Index gained a giddy height of 66,551.84 basis points on March 5, 2008. Most of the equities grew bullish and the Nigerian Capital Market was thrown into frenzy.
The market became the toast of the Nigerian Business community, with traders, civil servants, farmers and even students making equity investments.
Many analysts noted that the Nigerian Stock Exchange (NSE) became a beehive of activities with both investors and speculators scrambling to make a kill. Some individual stocks recorded over 100% appreciation while others edged up by 50% and above.