Nigerian Equity Market Declines by N265bn on Thursday

• Nigerian Equity Market Declines by N265bn on Thursday

Nigerian stock investors lost N265 billion on Thursday as the bearish trend continues.

The Nigerian Stock Exchange (NSE) has been on the decline for the last seven weeks but attempted to call a bottom on Tuesday when Airtel Africa was listed, however, it plunged again on Wednesday to resume the long bearish trend as business sentiment remains weak.

Despite Airtel Africa adding N1.3 trillion to market capitalisation, investors are wary of lack of economic direction as President Buhari is yet to constitute an economic team six weeks after the inauguration.

The exchange shed N30 billion on Wednesday and another N265 billion on Thursday to drag market capitalisation from N14.258 trillion it closed on Wednesday to N13.993 trillion on Thursday.

NSE All-Share Index dropped 186 basis points to settle at 28,712.90bps, while the year-to-date loss increased to 8.6 percent.

Activity level on the stock exchange also declined as both volume and value traded declined by 0.2 percent and 14.6 percent to 188.4 million and N3.2 billion, respectively.

FBN Holdings Plc led top traded stock by volume with 50.1 million units.

Followed by Zenith Bank Plc 21.1 million units; Access Bank Plc 18.9 million; MTN Nigeria N724.9 million; Zenith Bank N404.3 million; and Guaranty Trust Bank Plc N380.7 million.

A total of 18 stocks closed in the red, while 10 stocks recorded gain.

Airtel Africa has lost a total of 18.98 percent in value in the last two days to close at N323.50 a share on Thursday. It dropped 10 percent from N399.3 it closed on Tuesday to N359.4 on Wednesday.

Meristem Securities Limited said Airtel shares could be mirroring its London Stock Market performance where it dropped as much as 15 percent on the second day of its listing.

They said, “MTN Nigeria has been trading over-the-counter before its listing in May, unlike Airtel, but added that a tax dispute with the Nigerian government may have dented MTN’s valuation.

“MTN said it will sell more shares once the tax issue is resolved. Airtel’s listing valuation provides a comparable for MTN Nigeria, which has a return on equity of 93 per cent as against Airtel Africa’s 50 per cent.”

Analysts at Afrinvest, who also commented on the nation’s stock performance, said: “While we expect the downward trend to continue in the near term, it presents opportunities to position in premium stocks.”