Nigerian Stock Market Dips as Uncertainty Surrounding Nigerian Economy Deepens Amid Cash Crunch

The Nigerian stock exchange extended its decline by another N13 billion last week as a cash crunch amid high-interest rates dragged on economic activity.

The Central Bank of Nigeria (CBN) led monetary policy committee raised interest rates by 50 basis points to 18% despite Nigeria’s cash crisis, high unemployment rate and weak economic activity. The committee hinged its decision on the rising inflation rate and the need to lure foreign investors into the economy given that developed economies were doing the same.

During the week, stock investors exchanged 1.689 billion shares worth N11.066 billion in 14,019 deals, in contrast to a total of 853.745 million shares valued at N11.841 billion that exchanged hands in 18,543 deals in the previous week.

Breaking down key sectors, the healthcare industry led the activity chart with 1.086 billion shares valued at N1.627 billion traded in 267 deals. Therefore, contributed 64.32% and 14.70% to the total equity turnover volume and value, respectively.

The financial services industry followed with 379.556 million shares worth N4.547 billion in 6,711 deals. In third place was the conglomerates industry with a turnover of 89.526 million shares worth N131.231 million in 534 deals.

Neimeth International Pharmaceuticals Plc, Transnational Corporation Plc and United Bank for Africa Plc were the three most traded equities accounting for a combined 1.248 billion shares worth N2.347 billion that exchanged hands in 1,102 deals and contributed 73.89% and 21.21% to the total equity turnover volume and value, respectively.

The market value of listed equities decreased by N13 billion from N29.916 trillion recorded in the previous week to N29.903 trillion last week.

The NGX All-Share Index 0.04% or 22.86 index points to close the week at 54,892.53 index points, down from the 54,915.39 index points it closed in the previous week.

All other indices finished higher with the exception of NGX Main Board, NGX 30, NGX Insurance, NGX MERI Growth, NGX Consumer Goods and NGX Industrial Goods which depreciated by 0.30%, 0.16%, 0.53%, 0.58%, 0.74%, and 0.49% respectively while the NGX ASeM, NGX Oil and Gas, NGX Growth and NGX Sovereign Bond indices closed flat.

Twenty-eight equities appreciated in price during the week higher than nineteen equities in the previous week. Twenty-seven equities depreciated in price lower than forty-seven in the previous week, while one hundred and two equities remained unchanged, higher than ninety-one equities recorded in the previous week.