- Stock Market Records Highest Daily Loss in Eight Months
The nation’s equities market recorded its highest daily loss in eight months at the close of trading on the floor of the Nigerian Stock Exchange on Wednesday.
Sell-offs drove the NSE All Share Index lower by a record 3.5 per cent to close at 32,292.79 basis points.
The market capitalisation of listed equities dropped below N12tn, losing N422.2bn to close at N11.784tn on Wednesday.
The year-to-date loss dipped to 15.6 per cent while activity level strengthened as a total of 246.906 million stocks valued at N6.930bn exchanged hands in 3,912 deals, an increase of 63.9 per cent and 334.0 per cent in volume and value, respectively.
The top traded stocks by volume were Access Bank Plc (46.2 million), FBN Holdings Plc (22.6 million) and Transnational Corporation of Nigeria Plc (19.7 million), while the top traded stocks by value were Dangote Cement Plc (N3.9bn), Nestlé Nigeria Plc (N748m) and Guaranty Trust Bank Plc (N519.2m).
Sector performance was largely bearish as only the oil and gas Index gained.
Gains in Seplat Petroleum Development Company Plc and Forte Oil Plc by 0.6 per cent and 4.4 per cent, respectively, drove the index 0.4 per cent higher.
The industrial index fell by 3.9 per cent following sell pressures in Dangote Cement Plc and Cement Co. of North Nigeria Plc, which declined by 5.8 per cent and 9.9 per cent, respectively.
Similarly, the banking index fell by 2.8 per cent on the back of losses in Stanbic IBTC Holdings Plc and Access Bank Plc, which declined by 8.9 per cent and 8.6 per cent, respectively.
Continued sell-offs in Nigerian Breweries Plc and profit-taking in Nestlé Nigeria Plc pulled the consumer goods index down by 1.6 per cent.
Likewise, the insurance index closed at 1.4 per cent lower on the back of losses in NEM Insurance Plc and AIICO Insurance Plc, with respective declines of 3.2 per cent and 6.7 per cent.
Ten stocks recorded price appreciations while 37 stocks declined.
The top five gainers were Law Union and Rock Insurance Plc, Skye Bank Plc, Jaiz Bank Plc, Wema Bank Plc and Japaul Oil & Maritime Services Plc.
Law Union saw its share price increase by 9.09 per cent to close at N0.60, while Skye Bank appreciated by 8.93 per cent to close at N0.61 per share.
Jaiz Bank appreciated by six per cent to close at N0.53 per share, while Wema Bank and Japaul Oil saw their share prices increase by 5.26 per cent and 4.55 per cent to close at N0.60 and N0.23, respectively.
Universal Insurance led the losers, depreciating by 10 per cent to close at N0.27 per share.
Cement Company of North Nigeria Plc followed, declining by 9.87 per cent, while Fidelity Bank Plc (9.58 per cent), LASACO Assurance Plc (9.09 per cent), Stanbic IBTC Holdings Plc (8.89 per cent) Diamond Bank Plc (8.89 per cent) and 31 others dragged the stock market lower.
Analysts at Afrinvest Securities Limited said the strong bearish sentiments witnessed in Tuesday’s session weighed heavily across trading on Wednesday.
“Following this, we anticipate a possible rebound before the close of the week as investors buy the dip for stocks with attractive entry prices as witnessed in Guaranty Trust Bank Plc. This, however, does not change our near-term bearish outlook on market,” they added.
The Managing Director/Chief Executive Officer, BlackBit Limited, Wale Ajibade, attributed the decline to negative foreign sentiments around investment climate, which he said could be as a result of the approaching elections.
“We are entering election season and there might be reactions from foreign portfolio investors, who are pulling out of their positions. Also, there is pressure on the domestic side where people have more expenses; so, investors are selling more than they are buying. However, the largest contributor to the decline can be attributed to the winding down of portfolio investments by foreign investors,” he added.
The Managing Director, Cowry Asset Management Limited, Johnson Chukwu, said the decline was due to weak and negative market sentiments.
According to him, people watch out for market performance and if the market is moving negatively, they want to sell.
He noted that investors sold more than they bought because they were not encouraged by the market performance of the previous day.
“What happened is that people were apprehensive and they panicked because the market did not perform very well yesterday (Tuesday),” he added.