With most businesses still reeling from the impact of the pandemic, the South Pacific Stock Exchange (SPX) expects share price volatility and mixed investor sentiment to continue in the short term as the uncertainties surrounding the pandemic are gradually offset with hopes of economic recovery bringing in investor optimism in 2021.
In the SPX Stock Market Review for 2020, acting chief executive officer Pretesh Prasad said overall, while the aggregate market capitalisation recorded a drop, the average total stock market return in 2020 remained competitive and in the positive territory for the 10th successive year averaging at 9.07 per cent.
“On the local equities front, Fiji’s stock market was not left unscathed amid the economic turmoil as various listed entities witnessed a challenging year in terms of their operations and the unfavourable circumstances also resulted in listed entities reassessing their financial projections amid the rapidly shifting landscape of the global economy resulting in decisions by some entities to delay or suspend dividend announcements or to decrease dividend payments in comparison to the previous financial year,” he said.
Mr Prasad said the exchange also noted investors to realign their saving, investment and consumption priorities and paying attention to their cash flows more than ever before.
However, he said investors with surplus cash were seen to take advantage of the lower prices and extended their investment portfolios maintaining a long-term focus for greater returns from their investments in shares of SPX listed entities.
According to the report 260 new investors entered the Fijian stock market in 2020 and a comparison with last year shows that total number of new investors was lower by 72.49 per cent.
Mr Prasad said the new investor statistics in 2020 stood higher in comparison with the new investor trends recorded in the 2017 and 2018 financial years, essentially indicating that investors while being cautious, do value and realise the long-term potential of share investments to outperform other investments and that a greater proportion of potential investors consider share investing as part of their long-term plan.
The report revealed that the 260 new investors yielded 861 transactions and contributed 2,183,056 shares in volume traded and garnered $2.9m in value traded.
It was also noted that as a percentage of the aggregate trading statistics for 2020, the new investors accounted for 31.11 per cent of the overall number of trades, 24.09 per cent of the overall volume traded and 15.07 per cent of the overall value traded.
