The Nigerian Exchange Limited (NGX) extended its decline in the week ended March 18, 2022. The Exchange sheds 0.33% amid rising economic uncertainty, harsh business operating environment, among others.
During the week, only 21 equities gained in price while a total of 45 equities lost points. The remaining 90 equities closed flat, indicating a broad-based weak sentiment in the stock market.
As expected, the activity level dropped with investors trading 2.449 billion shares worth N20.653 billion in 20,764 deals, in contrast to a total of 2.798 billion shares valued at N23.859 billion that exchanged hands in 22,970 deals last week.
Sectorial analysis showed the financial services industry led the activity chart with 1.810 billion shares valued at N11.556 billion traded in 11,233 deals. Therefore, contributing 73.91% and 55.96% to the total equity turnover volume and value, respectively.
The ICT Industry followed with 349.937 million shares worth N4.050 billion in 1,292 deals. In third place was The Conglomerates Industry, with a turnover of 101.523 million shares worth N548.693 million in 1,084 deals.
FCMB Group Plc, ETranzact International Plc, and Fidelity Bank Plc were the three most traded equities and accounted for 1.472 billion shares worth N5.064 billion in 1,006 deals. The three contributed a combined 60.12% and 24.52% to the total equity turnover volume and value, respectively.
Market value of listed equities declined by N83 billion from N25.566 trillion it closed last week to N25.483 trillion this week. The NGX All-Share Index shed 0.33% or 154.81 index points to 47,282.67 index points. The year-to-date gain adjusted to 10.69%.
Similarly, all other indices finished lower with the exception of NGX Meri value, NGX lotus II and NGX Industrial Goods indices, which appreciated by 0.76%, 0.12% and 0.14% respectively While NGX Asem, NGX Growth and NGX Sovereign bond indices closed flat.
Rising inflation amid persistent forex scarcity are some of the challenges businesses operating in Nigeria are facing. On Friday, manufacturers had demanded that the federal government reverse tax and levies on importation of petroleum products.
Other issues are fuel scarcity and the total collapse of the power grid. Almost 200 million Nigerians are thrown in darkness yet they can not power their electricity generators due to fuel scarcity. The productivity of these businesses drop and subsequently dragged on their stock values.
Earlier in the week, one of Nigeria’s most respected entrepreneurs and investors, Tony Elumelu attributed the situation to Nigeria’s growing insecurity that prevented her from taking advantage of the recent jump in crude oil price. He claimed 95% of the nation’s crude oil production is lost to theft.
Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.
Transnational Corporation Plc (Transcorp) has delisted 40,647,990,293 shares from the Nigerian Exchange Limited on Monday and listed a newly reconstructed issued share capital of 10,161,997,574 ordinary shares.
In a statement seen by Investors King, the company said “We refer to our market bulletin with reference number NGXREG/IRD/MB73/24/10/10, dated 10 October 2024, wherein the Market was notified that trading in the shares of Transnational Corporation Plc (Transcorp or the Company) was placed on suspension effective, Thursday, 10 October 2024, in preparation for the share reconstruction of the Company’s Issued shares.
“The Market is hereby notified that the entire 40,647,990,293 issued shares of Transcorp were delisted from the Daily Official List of Nigerian Exchange Limited (NGX) on Monday, 28 October 2024, while the newly reconstructed issued share capital of 10,161,997,574 ordinary shares of 50 Kobo each were also today, listed on the Daily Official List of NGX at N44.2 per share.
“The delisting of 40,647,990,293 ordinary shares and listing of 10,161,997,574 ordinary shares on NGX is pursuant to the approval received from the Company’s shareholders at its Annual General Meeting of 27 May 2024 and the no-objection received from the Securities and Exchange Commission.
“Consequently, following the completion of the share reconstruction, the suspension placed on the securities of the Company has been lifted.”
Transnational Corporation Plc (Transcorp), Nigeria’s largest listed conglomerate, gained N34.70 or 313.03% a share last week to close at N45.75 a unit after the company’s unaudited financial statement for the third quarter showed 352% year-on-year growth in profit before tax to N34.566 billion.
During the week, investors on the floor of the Nigerian Exchange Limited (NGX) transacted 2.717 billion shares worth N54.632 billion in 46,848 deals, against a total of 2.142 billion shares valued at N85.946 billion that exchanged hands in 41,217 deals in the previous week.
The Financial Services Industry led the activity chart with a combined 1.821 billion shares valued at N28.958 billion traded in 20,173 deals, therefore, contributing 67.01% and 53.01% to the total equity turnover volume and value, respectively.
The ICT Industry followed with 389.848 million shares worth N6.560 billion in 2,515 deals. In third place was the Conglomerates Industry with a turnover of 160.993 million shares worth N4.746 billion in 3,623 deals.
Fidelity Bank Plc, Chams Holding Company Plc and United Bank for Africa Plc accounted for 1.225 billion shares worth N17.721 billion in 4,912 deals and contributed 45.10% and 32.44% to the total equity turnover volume and value, respectively.
The NGX All-Share index closed the week in the red at 97,432.02 index points, a 2.03% decline from 99,448.91 index points recorded in the previous week. The Exchange year-to-date return moderated to 30.30%.
Also, the market capitalization of listed equities dipped by the same 2.03% from N60.261 trillion to N59.039 trillion.
Similarly, all other indices finished lower with the exception of NGX Banking, NGX AFR Bank Value, NGX AFR Div Yield, NGX MERI Growth, NGX MERI Value, NGX Oil & Gas and NGX Growth which appreciated by 0.19%, 1.76%, 1.52%, 0.16%, 0.48%, 1.15%, and 0.07% respectively while the NGX ASeM index closed flat.
Thirty-nine equities appreciated in price during the week lower than fifty-eight equities in the previous week. Forty-five equities depreciated in price higher than eighteen in the previous week, while sixty-eight equities remained unchanged, lower than seventy-six recorded in the previous week.
Stockbrokers and investors have abandoned the equity market due to the Naira volatility, lack of market drive towards the end of the year, and the high interest rate in Nigeria.
A long-time investor, David Adonri explained that the volume of trade usually drops towards the end of the year but the market normalises in January.
With the persistent drop in the value of the Nigerian Naira against foreign currencies, investors are wary of unfavourable currency conversion.
“The equity market reacts to so many things. The depreciation of the naira, which is around N1,700, of course, would impact the market. The foreign exchange position can make people exit the market and convert to hard currency, which is stronger, possibly to come back to the market when they see an improved currency level. That is what we call carry-over trade,” Adonri said.
“We also have the hike in the interest rate, which also causes financial assets to migrate away from the capital market,” Adonri added.
“Third, we are in the period of the year, where seasonally, the market is a little bit down because there is nothing specific to drive the market like full-year results or half-year dividends and so on. So we slide to a low tempo from September up to November until after Christmas the market starts trending up again,” he further stated.
According to a report by the Nigerian Exchange Group (NGX), equity investment transactions dropped in Q3, 2024 compared to the previous quarter of the year.
In the same vein, the National Bureau of Statistics (NBS) reported that capital importation showed that investors shifted from equity investment to portfolio investment.
The portfolio investment includes equity, bonds, and money market instruments.
With the recent shift, the portfolio investment made a 10.37 percent increase amounting to a $106.85 million gain from the N1.03 billion total capital inflow.