Investors Lose N902bn In Four Days

Investors at the Nigerian equities market closed weekend with a net loss of N901.98 billion as increased selloffs forced most stocks to close at lower prices.

Benchmark indices for Nigerian equities closed weekend with average decline of 3.41 per cent, equivalent to net capital depreciation of N901.98 billion. The bearishness depressed the average year-to-date return to 10.85 per cent.

With more than four decliners for every advancer, the general market sentiment was negative and there were almost no safe havens for investors.

The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Exchange (NGX), dropped from its week’s opening index of 49,024.16 points to close weekend at 47,351.43 points. Aggregate market value of all quoted equities also declined from its opening value of N26.451 trillion to close lower at N25.791 trillion. The decline in market capitalization was moderated by the listing of the N250 billion Geregu Power during the week.

All sectoral indices closed in the red with the influential banking sector index leading with a drop of 3.37 per cent. The NGX Insurance Index dropped by 1.16 per cent. The NGX Oil and Gas Index dipped by 1.02 per cent. The NGX Consumer Goods Index slipped by 0.56 per cent while the NGX Industrial Goods Index lost 0.33 per cent. The NGX 30 Index- which tracks the 30 largest stocks at the Exchange had declined by 3.45 per cent, underlining the losses suffered by large-cap stocks. The NGX Pension Index, which tracks stocks specially screened in line with pension investment guidelines, dropped by 2.31 per cent while the NGX Lotus Islamic Index- which tracks portfolios that comply with Islamic investment rules, declined by 3.20 per cent.

There were 11 gainers to 46 losers last week as against 25 gainers and 33 losers recorded in the previous week. Nascon Allied Industries led the losers with a drop of 13.64 per cent to close at N9.50. Cornerstone Insurance dropped by 10.71 per cent to close at 50 kobo. Neimeth International Pharmaceuticals, May and Baker Nigeria and Airtel Africa lost 10 per cent to close at N1.26, N3.69 and N1,800 respectively. Presco dropped by 9.99 per cent to close at N128.35 while Okomu Oil Palm declined by 9.98 per cent to close at N169.50 per share.

Total turnover dropped to 586.939 million shares worth N8.837 billion in 17,183 deals during the four-day trading week as against a total of 1.005 billion shares valued at N10.406 billion traded in 17,844 deals two weeks ago.

The financial services industry led the activity chart with 393.814 million shares valued at N4.660 billion in 9,168 deals; thus contributing 67.1 per cent and 52.73 per cent to the total equity turnover volume and value respectively. The information and communication technology (ICT) industry staged a distant second with 48.178 million shares worth N1.203 billion in 1,294 deals while the third place was occupied by conglomerates industry, with a turnover of 40.135 million shares worth N44.406 million in 513 deals.

Banking stocks dominated the top activities chart with the trio of Guaranty Trust Holding Company Plc, Sterling Bank Plc and Zenith Bank Plc accounting for 239.637 million shares worth N3.546 billion in 4,375 deals, contributing 40.83 per cent and 40.13 per cent to the total equity turnover volume and value respectively.

“Looking ahead, we see room for a near-term rebound for the Nigerian equities market after four consecutive months of decline. However, we believe the probability of a strong rebound is limited as investors continue to remain attracted to high-yielding money market instruments. In addition, election activities in Nigeria have kicked in, creating further palpitations for investors. As a result, we retain our view that investors should continue to underweight domestic equities in their portfolios,” FSDH Securities stated in an investment advisory note.

“Next week, we anticipate extended bearish momentum as investors continue to rotate into high-yielding fixed-income assets,” Afrinvest Securities stated.

Analysts at Cordros Capital said they expected the weak sentiments that dominated the market to persist in the week ahead as investors continue to scale down exposure to equities amidst expectations of a continued uptick in fixed-income yields.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” Cordros Capital stated.