Investors’ wealth slumps by 0.09% over weak patronage, apathy

Weak domestic patronage has continued to spur increased price volatility and apathy on the equity sector of the Nigerian Stock Exchange (NSE).

This is just as all eyes are now focused on the new economic advisory team of the Federal Government to provide a workable roadmap that would stimulate consumption and production, as well as drive economic growth.

The market developments caused the All-Share Index (ASI) and capitalisation to depreciate by 0.09 per cent to close the week at 27,675.04 points and N13.472 trillion respectively.

However, all other indices finished higher with the exception of NSE All-Share, NSE CG, NSE Premium, NSE Banking, NSE AFR Bank Value, NSE AFR Div Yield, NSE MERI Growth and NSE Industrial Goods Indices, which depreciated by 0.09 per cent, 0.01 per cent , 0.99 per cent , 1.64 per cent, 1.94 per cent, 1.25 per cent, 1.15 per cent and 1.83 per cent respectively.

A breakdown of trading last week showed that the market reopened on a downward note on Monday, occasioned by price losses in most blue chip stocks, as the ASI depreciated by 0.2 per cent.

Specifically, at the close of transactions on Monday, the ASI decreased by 48.41 absolute points, representing a dip of 0.2 per cent to close at 27,650.28 points.

Similarly, the market capitalisation lost N24 billion to close at N13.460 trillion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, among which were Presco, UAC of Nigeria (UACN), Nigerian Breweries, Vitafoam Nigeria and Dangote Cement.

Investors’ sentiments remained weak at the close of transactions on Tuesday, following price losses incurred by virtually all the blue chip stocks, causing market capitalisation to depreciate further by N145 billion.

At the close of trading on Tuesday, six stocks recorded price appreciation, while 28 other constituted the losers’ chart.

Precisely, the ASI fell by 298.04 points or 1.08 per cent to 27,352.24 points, while investors lost N145 billion in value as market capitalisation declined to N13.315 trillion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, among which were Mobil Nigeria, Stanbic IBTC Holdings, Cadbury Nigeria, MTN Nigeria and Guaranty Trust Bank.

The dominance of the bears continued unabated on Wednesday, occasioned by losses in highly capitalised stocks, resulting to a further slide in ASI by O.3 per cent.

Specifically, at the close of transactions on Wednesday, the ASI fell by 69.19 points or 0.3 per cent to 27,283.05 points, as investors lost N34 billion in value as market capitalisation declined to N13.281 trillion. Investors traded shares valued at N7.925 billion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, among which were Dangote Cement, Guinness Nigeria, MTN Nigeria, Skyway Aviation Handling Company and Zenith Bank.

The bulls regained strength at the end of Thursday’s transactions, occasioned by price gains in medium and high cap stocks, as the ASI soared by 1.09 per cent.

The ASI appreciated by 296.80 points or 1.09 per cent to 27,579.85 points, while investors gained N145 billion in value as market capitalisation went up to N13.426 trillion.

The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; Nestle Nigeria, Seplat Petroleum Development Company (Seplat), Total Nigeria and Access Bank.

Unfortunately, the upturn recorded on Thursday was not enough to wipe out loses recorded in the first three trading sessions.

On the outlook of the market this week, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, argued that the market would witness a slowdown due to profit-taking, as fund managers position ahead of the quarter-end, while bargain hunters take advantage of low stock prices to position, now that the NSE index has resisted further decline.

“Discerning investors should latch on it to average down and recoup their investment immediately a recovery stage is set through economic policies and things start to change gradually to influence equity prices positively.

“Investors should watch these sectors that have become defensive recently like insurance, banking, industrial goods, services and oil/gas that will go bullish in no distant time.

Analysts at Codros Capital Plc, also said: “Over the coming weeks, we expect the market to remain pressured given global risk-off sentiments and weak domestic participation.

“Nonetheless, we note that valuations remain attractive, while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury bills.

“Hence, we advise that long-term investors consider appropriately timed investments.”

Further analysis of last week’s trading indicated that a total turnover of 1.097 billion shares worth N16.693 billion was recorded in 14,717 deals by investors on the floor of the exchange in contrast to a total of 1.272 billion shares valued at N18.750 billion that changed hands in 19,482 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 751.568 million shares valued at N6.414 billion traded in 8,086 deals; thus contributing 68.53 per cent to the total equity turnover volume.

The consumer goods industry followed with 141.469 million shares worth N8.531 billion in 2,427 deals.

The third place was conglomerates Industry with a turnover of 101.787 million shares worth N203.242 million in 956 deals.

Trading in the top three equities namely, Access Bank Plc, Nigerian Breweries Plc and Custodian Investment Plc (measured by volume) accounted for 494.681 million shares worth N8.954 billion in 2,137 deals, contributing 45.11 per cent to the total equity turnover volume.

A total of 16,253 units valued at N1.103 million were traded last week in 13 deals compared with a total of 96 units valued at N215,654.78 transacted in six deals during the preceding week.

Also, 36,581 units of Federal Government bonds valued at N37.504 million were traded in 16 deals compared with a total of 17,761 units valued at N20.361 million transacted last week in five deals.