Investors in the Nigerian Stock Exchange gained N1.934 trillion in October as the market recorded its best monthly gain since 2018 on the continued inflow of funds.
This was against the background of searching for real returns and positive reactions to the better-than-expected third quarter(Q3) and nine months earnings so far released.
The market capitalisation, which measures the total value of listed equities, rose from N14.024 trillion at the end of September to N15.958 trillion at the end of October, indicating a growth of N1.934 trillion or 13.79 per cent.
Similarly, the NSE All-Share Index (ASI), the benchmark index, climbed 13.8 per cent from 26,831.76 to close at 30,530.69, compared to 5.9 per cent growth recorded in September.
The performance in October has pushed the year-to-date growth of the market to 13.7 per cent, making the Nigerian equities market the second-best performing among the 93 major global markets tracked by Bloomberg.
Out of the 20 trading sessions in October, the market was up in 13 sessions and down in just seven trading days.
Besides, the value of trading increased significantly as investors traded 8.97 billion shares in 106,626 deals as against 5.95 billion shares traded in September.
The positive performance stemmed from continued activities of bargain hunters, who have swooped on the stock market in search of higher yields in the face of increasingly negative real returns in the fixed income market and absence of attractive alternative investment options.
According to the Chief Research Officer, Investdata Consulting Limited, Mr. Ambrose Omordion, the low yield environment and other factors triggered buying interest in the market despite the seeming disconnection with economic realities to sustain the four consecutive months of a bullish run.
He said the positive close on bullish sentiment, successfully defied the social unrest tension of EndSARS that led to the shooting of protesters and destruction of public and private property worth trillions of naira, in the midst of high liquidity and the influx of mixed corporate earnings reports released over the past two weeks. The Chief Executive Officer of the NSE, Mr. Oscar Onyema, had linked the stock market rally to CBN’s restriction of domestic investors from participating in its open market operations (OMO) as well as the interest rate cut.