Amid fears of persistent decline in global oil prices and rising cases of COVID-19, the equities market recorded the highest decline since 12th September 2019 yesterday, causing market capitalization to depreciate further by N329 billion.
Besides, only one stock appreciated in price at the end of yesterday’s transactions on the Nigerian Stock Exchange (NSE). Specifically, at the close of trading yesterday, the All-Share Index (ASI) decreased by 632.07 absolute points, representing a dip of 2.41 percent, to close at 25,647.54 points, the largest decline since September 12, 2019. Similarly, the overall market capitalization size gained N329 billion to close at N13.366 trillion
Consequently, the Month-to-Date return loss stood at 2.2 percent, as Year-to-Date loss also increased to 4.5 percent. The downturn was impacted by losses recorded in medium and large capitalized stocks, amongst which are; Nigerian Breweries, Stanbic IBTC Holdings, Guaranty Trust Bank, Zenith Bank, and Conoil.
Analysts at Afrinvest Limited said: “With the widespread of COVID-19 inducing a four-year low in global crude oil prices, we believe the dark clouds are gathering.
“As such, we expect investors to remain risk-averse towards the equities market in the near term, although there is headroom for bargain hunting activities due to the cheap valuation of stocks and the local bourse relative to peers.”
The Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion said: “While discerning investors should take advantage of the current low stocks valuation to position for the medium to long-term, it is noteworthy that the Nigerian equities market is selling at a discount and therefore offers high upside potential.
“We should, however, not overlook the possibility of a bargain-hunting motive supporting positive performance, especially with many fundamentally sound stocks remaining underpriced. With a dividend yield of major blue chips continuing to look attractive in recent weeks, we expect speculative trading to shape the market’s direction, despite the seeming mixed outlook.”
Market breadth closed strong negative, with only a gainer versus 15 losers. Consolidated Hallmark Insurance, the only gainer for the day appreciated by 7.14 percent, to close at 30 kobo, per share.
On the other hand, Access Bank, Conoil, Cornerstone Insurance, Fidelity Bank, Nigerian Aviation Handling Compan (NAHCO), Oando, Stanbic IBTC Holdings, United Capital and Unilever Nigeria led the losers’ chart by 10 percent, each to close at N7.65, N16.20, 45 kobo, N1.80, N2.25, N2.43, N31.50, N2.34 and N11.70, per share, respectively.
Vitafoam Nigeria and Guaranty Trust Bank followed with a decline of 9.96 percent, each to close at N4.07 and N22.15, respectively, while Nigerian Breweries fell by 9.93 percent to close at N36.75, per share.
Similarly, the total volume of trades dipped by 48.6 percent to 185.65 million units, valued at N1.83 billion and exchanged in 2,690 deals.
Transactions in the shares of Zenith Bank topped the activity chart with 53.51 million shares valued at N907.08 million. Transnational Corporation of Nigeria (Transcorp) followed with 23.06 million shares worth N18.004 million, while Guaranty Trust Bank traded 15.21 million shares valued at N336.81 million.
Skyway Aviation Handling Company traded 8.37 million shares valued at N19.59 million, while Law Union and Rock Insurance transacted 6.87 million shares worth N6.69 million.