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Nigerian Equities Market Records Worst Weekly Losses

NSE 3 1

It was a gloomy week for the domestic bourse as fear of Coronavirus and lower oil price panic-selling drove the market to new record weekly losses.
Consequently, the NSE All-share index and market capitalization both depreciated by 13.49 percent to close the week at 22,733.35 and N11.847 trillion respectively.

All other indices also finished lower while NSE ASeM Index closed flat.

Analysts predict slowdown on the losing momentum as low prices of stocks, and high dividend yields attract buying interest that cannot be resisted by smart money.

Specifically, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said: “as more audited corporate earnings hit the market, going forward. This is despite the likely continuation of the mixed intraday movement in the midst of selloffs.

“The impact of the virus seems heavy, killing more stock markets and economy than people across the globe, sending panic waves around the world, more devastating than the financial meltdown of 2008.

“Nigerian stocks hit new lows as the NSE’s benchmark index hit a new 11-year low on a huge traded volume that suggests that investors are dumping their shares, in their frenzied bid to cut their losses.

“Investors are expected to increase positions in undervalued stocks ahead of dividend declaration, also against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market.”

Analyst at Codros Capital Limited said: “Looking ahead, we still see sizeable legroom for further downslide in risk assets as investors continue to run towards safety in the face of the precipitous decline in oil price.”

A breakdown of transactions last week’s trading showed that the equities market recorded the highest decline since September 12, 2019, amid fears of persistent decline in global oil prices and rising cases of COVID-19, causing market capitalization to crash further by N329billion.

Besides, only one stock appreciated at price at the end of the transactions on the Nigerian Stock Exchange (NSE).

Specifically, the All-Share Index (ASI) fell 632.07 absolute points, representing a dip of 2.41 percent to close at 25,647.54 points.

Similarly, overall market capitalization size gained N329billion to close at N13.366trillion

Consequently, the Month-to-Date return losses stood at 2.2 percent, as Year-to-Date losses also fell 4.5 percent. The downturn was impacted by losses recorded in medium and large value stocks, amongst which were; Nigerian Breweries, Stanbic IBTC Holdings, Guaranty Trust Bank, Zenith Bank, and Conoil.

At the end of Tuesday’s transactions, investors lost a whopping N656billion even as the market continues to plunge on COVID-19 spread and oil crash fears.

Specifically, the ASI fell 1,258.88 absolute points or 4.91 percent to close at 24,388.66 points, the largest single-day decline since falling 8.4 percent on March 19.

Similarly, the overall market capitalization size shed N656billion to close at N12.710trillion.

The decline was impacted by losses recorded in medium and large value stocks, amongst which were; MTN Nigeria, Nigerian Breweries, Stanbic IBTC Holdings, Chemical, and Allied Products (CAP) Plc, and Guaranty Trust Bank.

Sell pressure on the Nigerian equities market continued on Wednesday trading session with a decline of 3.35 percent on price losses in high-value stocks.

The ASI fell by 815.91 points or 3.35 percent to 23,572.75 points. Accordingly, investors lost N426billion in value as market capitalization declined to N12.284trillion.

On Thursday, ASI, which measures the performance of listed firms slumped six-year low, shedding 3.72 percent to 22,695.88 from 23, 572.75 at which it opened for trading largely due to the persistent sell pressure on medium/large capitalized stocks.

Specifically, at the close of trading, the ASI fell 876.87 absolute points or 3.72 percent to close at 22,695.88 points. Similarly, the overall market capitalization size shed N457billion to close at N11.827trillion.

The downtrend was impacted by losses recorded in large and medium capitalized stocks, amongst which were; MTN Nigeria, Okomu Oil, Presco, Nigerian Breweries, and Flour Mills of Nigeria.

Further analysis of last week’s trading showed that a turnover of 3.964 billion shares worth N43.703billion was recorded in 26,054 deals by investors on the floor of the Exchange.

This volume of shared traded was, however, lower than a total of 1.814 billion shares valued at N26.008billion that was exchanged last week in 23,494 deals.

The financial services industry (measured by volume) led the activity chart with 3.547 billion shares valued at N33.623billion traded in 19,150 deals; thus contributing 89.48 percent to the total equity turnover volume.

The consumer goods followed with 91.135 million shares worth N6.007billion in 2,341 deals. The third place was the conglomerate’s industry, with a turnover of 88.406 million shares worth N132.508 million in 679 deals.

Trading in the top three equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 2.448 billion shares worth N29.563 billion in 12,301 deals, contributing 61.75 percent to the total equity turnover.

Furthermore, a total of 75,285 units valued at N472.951million were traded this week in six deals, compared to 8,193 units valued at N68,491.03 transacted last week in 11 deals.

A total of 62,290 units of Federal Government Bonds valued at N71.461million were traded this week in 18 deals, compared with a total of 61,750 units valued at N69.995million transacted last week in 27 deals.

On the price movement chart, two equities appreciated at price during the week, lower than 36 equities in the previous week.

About 64 equities depreciated in price, higher than 25 equities in the previous week, while 97 equities remained unchanged, lower than 102 equities recorded in the preceding week.

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