Statistics obtained from the Nigeria Stock Exchange (NSE) has shown that a total of 65 stocks recorded gains in 2017. Among the 65 stocks, 12 rose by more than 100 per cent, compared to just three equities that recorded triple-digit price appreciation in 2016. Also, more than 30 stocks recorded two-digit capital growth for the same period to create value for investors.
The top five gainers were Dangote Sugar Refinery which rose by 227.33 per cent; International Brewery grew 194.59 per cent while Fidelity Bank, Fidson Healthcare and Dangote Flour recorded capital growth of 192.86 per cent, 189.06 per cent and 185.88 per cent respectively.
A further breakdown showed that the consumer goods and banking stocks dominated the best performance table for 2017, a situation that may likely continue in the New Year with other stocks that had performed well within the period, on the strength of improving companies, market and economy fundamentals.
On the flip side, more than 40 stocks were on the year’s laggards’ table, dominated by petroleum stocks. The top five are Forte Oil, which lost 48.5 per cent of its opening price for the year; University Press, 46.23 per cent, while MRS Oil, Mobil Oil and Julius Berger were down by 36.49 per cent, 30.25 per cent and 27.42 per cent respectively.
Also in the year under review, the stock market at the beginning of 2017 was flat but bottomed out in April as a result of 2016 full-year and 2017 Q1 earnings reports. The effect of this was enhanced by a review of the Central Bank of Nigeria (CBN) Foreign
Exchange policy, leading to the introdution of investors and exporters window that boosted FX liquidity, resulting in a relatively stable exchange rate regime, which impacted positively on the nation’s manufacturing sector and economic activities.
The ensuing rally was supported by low valuation, rising crude oil prices that helped to boost external reserves and government revenue at a time the Muhammadu Buhari administration unveiled its Economic Recovery and Growth Plan (ERGP).
This was meant principally to structure the government’s economic diversification efforts, which highlighted the administration’s focus on infrastructure development and agriculture to ensure self-sufficiency in food production and create employment for the country’s teeming youth population, while further driving recovery and growth.
The positive economic data and companies’ numbers were sustained during the year, reflecting on the prevailing economic expansion that strengthened the market and economic fundamentals that affected domestic and international investor confidence, which boosted demand for equities.
The year ended with stocks on the Nigeria bourse still relatively undervalued on the strength of strong numbers, even as data by the National Bureau of Statistics (NBS) showed that Nigeria’s economy grew by 1.4 per cent in Q3 2017 from 0.72 per cent (revised) in the preceding quarter, amidst expectations that Q4 could even be better.