The NSE all-share posted its largest daily gain of 5% in more than 5 years on 12th, November 2020 which triggered a 30-minutes halt of all the stocks for the first time since the Circuit Breaker was introduced in 2016. At the end of the week, the index appreciated by a whopping 12.97% to close the week at 35, 037.46 and N18.3 trillion market cap.
So far, the index is up by 30.53% on a year to date with NSE industrial index leading the pack followed by the NSE insurance and banking index.
I emphasized the fact that the low-interest-rate environment occasioned by CBN’s policies in the last 6 months to 1 year is bullish for stocks. Besides, I think the bull may push the NSE all-share to its 2017 high of 40,000 basis – which means we still have at least 10% additional run before I consider a larger sell-off.
One of the supporting factors is the near zero rates on short-term, medium and long-term bill which now prints at 0.04% (from 0.34%), 0.15% (from 0.50%), and 0.30 (from 0.98%) respectively. Even at this unattractive rates, subscribers bid, as at the last auction, on 90-days, 182-day and 364-day was N99.9 billion, N92.2 billion and N411.1 billion, amounting to N603.2 billion.
What’s surprising to me was when the CBN made the allotment, it sold N19.8 billion for the short term, N10 billion for the medium and N138b for the long-term – that’s N167.8 billion out of N603.2 billion, the question is what happens to the N435.4 billion that was unallotted?Continue reading “How Far Can NSE All-Share Index Go? Plus 3 Stocks to Watch.”