Nigerian
equities yesterday came under intense pressure, piling up a net loss of
about N684 billion within the 10-hour trading sessions in the past two
days.
Against the background of N425 billion
on Tuesday, aggregate market value of all quoted shares dropped by N259
billion. The two-day loss surpassed the total net gain of N613 billion
recorded in the previous week.
With nearly five losers to every gainer,
aggregate market value of all quoted equities on the Nigerian Stock
Exchange (NSE), which had opened this week at N9.926 trillion, dropped
to N9.501 trillion on Tuesday and trended further downward to N9.242
trillion.
The All Share Index (ASI), the benchmark
index for the Nigerian stock market, which had depreciated by 4.29 per
cent on Tuesday, dropped further by 2.72 per cent, pushing the average
year-to-date return deep into negative at 6.05 per cent.
The ASI dropped from its opening index
of 28,902.25 points for the week to 27,663.16 points and 26,910.23
points on Tuesday and yesterday.
Banking stocks headlined the
depreciation as investors grapple with uncertainties in the guided
flexible foreign exchange policy announced by the Central Bank of
Nigeria (CBN) last week amidst profit-taking transactions and month-end
portfolio rebalancing. The apex bank announced the adoption of a
flexible foreign exchange policy. However, the detailed guidelines on
the implementation of the flexible exchange rate have not been released.
Average loss in the banking sector more
than doubled the overall average loss in the entire market as most
banking stocks tumbled under open sale orders, unrestricted sell orders,
which sought to close the deals at any available price. The NSE Banking
Index, which tracks the banking sector, dropped by 6.9 per cent, after
the two most capitalised banking stocks-Guaranty Trust Bank and Zenith
Bank – lost 9.6 per cent and 9.2 per cent respectively.
“We expect the current bearish trend in
the market to continue as investors take profit following the impressive
gains recorded in the previous week. However, we do not rule out the
prospect of a change in tide, should the apex bank announce the expected
modalities for a more flexible foreign exchange rate regime as
indicated last week,” Afrinvest Securities stated in a post-trading
review.
Seven banking stocks ranked among the
top 10 losers, in percentage terms, with losses ranging around the 10
per cent maximum daily allowable percentage price change. Stanbic IBTC
led the losers with 9.70 per cent. United Bank for Africa declined by
9.47 per cent. FCMB Group dropped by 9.36 per cent. Skye Bank
depreciated by 8.40 per cent while Access Bank dropped by 6.88 per cent.
Total turnover stood at 352.29 million
shares valued at N3.85 billion in 5,024 deals. Zenith Bank was the most
active stock with a turnover of 56.73 million shares valued at N770.38
million. Guaranty Trust Bank followed with a turnover of 39.46 million
shares worth N696.6 million while Transnational Corporation of Nigeria
recorded a turnover of 30.47 million shares valued at N37.24 million.
Further sectoral analysis showed
widespread selling sentiments. The NSE Consumer Goods Index dropped by
2.9 per cent. The NSE Industrial Goods Index declined by 1.5 per cent.
The NSE Oil and Gas Index slipped by 1.3 per cent while the NSE
Insurance Index dipped by 0.8 per cent.
The Federal Government is to inject N6.5
billion into the capital market, Chairman, Senate Committee on Capital
Market, Senator Isiaka Adeleke, has said.
The news is coming even as senators and
members of the House of Representatives yesterdaybegan the process of
shoring up the dwindling fortunes of the capital market.
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