Investors in Nigerian equities finished 2020 financial year on an impressive note, as they gained N8.09tn.
The equities benchmark index recorded its highest return, rising 50 per cent this year to emerge the world’s best performing stock market year-to-date.
Checks by our correspondent showed that activities on the Nigerian Stock Exchange which opened the trading year at N12.96tn in market capitalisation and 26, 842.07 in index at the beginning of trading on January 2, 2020 closed at December 31st 2020 at N21.06tn and 40,270.72 index points and hence earned a year-to-date gain of about N8.09tn or 50.02 per cent year to date.
Analysts at InvestData Consulting said there had been positive sentiments for value, growth and highly capitalised stocks with attractive valuation, as investors repositioned for year-end seasonal trends and the much expected economic recovery in 2021.
“The bull run shows that smart money is still in the market. The ongoing Santa Claus rally is attributed to window dressing for year-end among institutional investors, even as bonuses are entering the market ahead of the New Year, as some investors are taking advantage of the tax code by selling positions they have taken losses at the end of December to buy back in January,” they said.
The analysts said although the inflationary trend remained a source of serious concern across the country, the equity market had so far provided a safe haven, with the NSE ASI returning 44.7 per cent year-to-date, remaining the only investment window that had outperformed inflation.
“The news of the Federal Government ordering the reopening of the nation’s borders is expected to add more momentum to factors driving the equity prices, going forward.
“Such factors, including the high liquidity in the system, low yields environment in the fixed income market, uptrend in oil price, the discovery of a vaccine for COVID-19, and the expected early passage of the 2021 budget have supported the positive sentiment in the market so far,” InvestDat said.