The Nigerian Stock Exchange (NSE or The Exchange) All Share Index (ASI) posted its largest daily gain in more than five years on Thursday, 12 November 2020. The ASI rose beyond the set threshold of 5%, triggering a 30-minute trading halt of all stocks for the first time since the circuit breaker was introduced in 2016.
The Circuit Breaker protocol was triggered at 12:55 pm when the NSE ASI increased from 33,268.36 in the previous day’s trading to 34,959.39. The market reopened at exactly 1:25 pm, with a 10-minute intraday auction session, before resuming continuous trading till the close of the day at 2:30 pm.
Following the resumption of trading activities, the equities market to record a 6.23% increase in the ASI to close at 35,342.46 points, reaching a market capitalisation of N18.47Tn. This marks the 5th consecutive daily gain of the Nigerian bourse.
The Exchange has remained resilient even in the face of the COVID-19 pandemic. Domestic investors continue to show interest in the market with the total value of transactions executed by domestic investors on the NSE standing at N731bn in the first eight months of 2020, as against N470.20bn total foreign transactions carried out during the same period. This shows that domestic investors outperformed transactions executed by foreign investors by N260.8bn or 55.47 per cent.
Equities continue to respond positively to macroeconomic policy changes such as the cut in Monetary Policy Rate (MPR) by 100 basis points from 12.5% to 11.5% by the Central Bank of Nigeria (CBN) in September 2020. It has also been observed that investors are targeting Nigerian companies with strong fundamentals with the expectation that they will best overcome the onslaught of COVID-19 and be able to distribute dividends to shareholders. This is particularly important given the low-interest-rate and negative real yield environment.
It is also noteworthy that the Exchange has continued to provide a platform for Issuers to raise capital, and for investors to meet their financial objectives despite restricted access to its office facilities. Trading has continued seamlessly during normal hours through the provision of remote trading access for Dealing Member Firms via X-NET, FIX Protocol and Virtual Private Network (VPN). Furthermore, The Exchange has successfully transitioned many of its physical engagements to digital events including its flagship Closing Gong Ceremony, Facts Behind the Figures series, CEO Engagement Sessions, Trainings and Workshops to further deepen engagement with capital market stakeholders.