Nigerian Stock Market Experiences Bearish Performance as Investors Seek Higher Yields in Fixed Income Markets

Last month was a bad one for the Nigerian equities market.

How do we know this? The All-Share Index fell by 1.38%. The index measures the average performance of stocks.

Year-to-date, the index is down by 7.9%.

In June, there were 47 gainers, 35 losers and 10 stocks remained unchanged.

Some stocks will do better or outperform the index. Some stocks will do worse or underperform the index.

Morison Industries Plc, University Press Plc, and Vitafoam Nigeria Plc were the top three best performing stocks in June.

They gained 48.9%, 42.7% and 40.0% month-on-month growth respectively, with Vitafoam closing at an all time high of ₦15.4.

The top losers in June were BOC Gases Plc, Airtel Africa Plc, and Royal Exchange Plc.

They fell by 2.48%, 20.23% and 16.44% respectively.

One reason for the poor performance could be the movement of some investors to the fixed income markets.

Fixed income securities are investment assets issued by a government, corporation or other entity as debt instruments. As a reward for investors, they get paid in the form of fixed interest payments and a return of the principal at maturity. Bonds and treasury bills are classic examples of fixed income securities.

Fixed income securities are usually best suited for risk averse investors. The Nigerian fixed income market has been experiencing rising rates, thereby attracting investors in a bid to hedge against inflation in the country.

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