A capital market expert, Mr Sola Oni, on Monday, attributed the lull in the Nigerian Stock Exchange (NSE) to the portfolio- switching by some foreign investors for higher returns in the U.S.
Oni, a Stockbroker and Chief Executive Officer, Sofunix Investment and Communications, told the News Agency of Nigeria (NAN) in Lagos that many foreign investors had embarked on portfolio switching because some collective investments were generating higher returns in America.
“We learnt that some collective investments are generating higher returns in the U.S., making many foreign investors embark on portfolio-switching,” he said.
Switching refers to the process of transferring investments. Within the prevailing investment market, investors may wish to switch from one fund to another.
Oni said it was not unusual that foreign investors were curious about what the general elections next year, thereby selling off their equities.
He said that investors would always realise profits in any market, adding that this was normal.
“If you watch the trend over the last couple of weeks, it has been a buyers’ market as supply side is higher than demand, and buyers are at liberty to buy at low prices.
“However, we should appreciate that most share prices of our listed companies are undervalued, relative to their intrinsic value.
“Therefore, the market is a veritable platform for real investors who have a fairly long investment horizon,” he said.
NAN reports that turnover of 1.84 billion shares worth N16.59 billion changed in 18,941 deals on the NSE last week.
This was against a turnover of 2.004 billion shares valued at N21.58 billion exchanged in 18,534 deals in the preceding week.
The Financial Services Industry led the week’s activity chart with 1.02 billion shares valued at N10.90 billion in 10,092 deals.
The sector contributed 55.28 per cent and 65.72 per cent to the total equity turnover volume and value, respectively during the period.
The Services Industry followed with 313.48 million shares worth N1.86 billion in 782 deals.
The third place was occupied by the Natural Resources Industry with a turnover of 304.92 million shares valued at N61.37 million achieved in 82 deals.
The NSE All-Share Index for the period declined by 652.96 basis points or 1.71 per cent to close at 37,625.59 from 38,278.55 reported in the preceding week.
NAN reports that 27 equities appreciated in price during the period under review, while 45 experienced price depreciation.
Mutual Benefits Assurance led the gainers’ table in percentage terms, gaining 21.62 per cent or 8k to close at 45k per share.
It was followed by Multiverse with a gain of 20 per cent or 4k to close at 24k; while Unity Bank gained 14.43 per cent or 14k to close at N1.11 per share.
Conversely, Forte Oil recorded the highest price loss in percentage terms, declining by 19.79 per cent or N6.50 to close at N26.35 per share.
Omoluabi Mortgage Bank trailed with a loss of 18.31 per cent or 13k to close at 58k, while Mcnichols was down by 17.35 per cent or 13k to close at 58k per share.