NSE Equities Capitalisation in Six-day Fall, Investors Dump Shares

• NSE Equities Capitalisation in Six-day Fall, Investors Dump Shares

The Nigerian Stock Exchange equities capitalisation, on Wednesday, continued its free fall for the sixth consecutive day, crashing by N69bn.

The NSE equities capitalisation dropped to N14.844tn from N14.913tn reported on Tuesday as sell offs in the local bourse persisted in the day’s trading session.

This, therefore, dragged the All-Share Index down to 41,495.43 from 41,686.36 basis points while the year-to-date gain contracted to 8.5 per cent. The negative performance was largely driven by sell pressures in Nestle Nigeria Plc, Stanbic IBTC Holdings Plc and Lafarge Africa Plc, which dropped by 2.2 per cent, 4.5 per cent and 6.6 per cent, respectively.

However, market activity improved as volume and value traded appreciated by 22.7 per cent and 44.4 per cent to 488.975 million units and N5.643bn, respectively.

The top-traded stocks by volume were African Alliance Insurance Plc (82.2 million), Japaul Oil & Maritime Services Plc (75.6 million) and Fidelity Bank Plc (63.9 million), while the top three traded stocks by value were Dangote Cement Plc (N1.1tn), Guaranty Trust Bank Plc (N886.6m) and Nigerian Breweries Plc (N867.7m).

Consequently, sector performance was largely bearish as three out of the five major NSE indices closed in the red, one closed positive while the other closed flat. The industrial goods index led losers, down by 2.5 per cent following price depreciation in Lafarge, which slumped by 6.6 per cent.

The insurance index trailed, falling by 1.9 per cent as AXA Mansard Insurance Plc and Unity Kapita Assurance Plc share depreciated, shedding 7.4 per cent and 7.7 per cent, accordingly.

The consumer goods index also dropped, shedding 0.7 per cent largely due to profit-taking in Nestle, Nigerian Breweries and PZ Cussons Nigeria Plc, which respectively slumped by 2.2 per cent, 0.9 per cent and 4.9 per cent.

However, the banking index appreciated by 0.1 per cent as investors took position in United Bank for Africa Plc, Zenith Bank Plc and GTBank, which respectively gained 4.1 per cent, 1.1 per cent and 0.3 per cent. The oil/gas index closed the day on a flat note.

Investor sentiment improved compared to Tuesday’s market performance as 18 stocks advanced against 33 that closed in the red. The best performing stocks were Fidelity Bank Plc, GlaxosmithKline Consumer Plc and Dangote Flour Plc, which appreciated by 7.8 per cent, five per cent and five per cent, accordingly while Cadbury Nigeria Plc, Unity Kapita Assurance Plc and AXA Mansard Insurance emerged as the worst-performing stocks, shedding 9.4 per cent, 9.4 per cent and 7.4 per cent, respectively.

Commenting on the state of the market, analysts at Afrinvest said in a note, “The sell offs experienced in the local bourse so far can largely be attributed to profit-taking in stocks that had rallied significantly before the beginning of the earnings season as well as contagion effect of the rout in equities across global markets.

“With investors sceptical of forward earnings vis-à-vis elevated valuations, sentiment has turned bearish in recent trading sessions. We believe declining level of valuation has presented investors with attractive entry opportunity; hence, we expect a reversal of the bearish trend in the near term.”