Increased market volatility, occasioned by post-election apathy and shortfall in money supply, has continued to trigger persistent downturn in the equities sector of the Nigerian Stock Exchange (NSE), raising more questions over the end of the current weak performance.
Indeed, both technical indicators and the lingering political uncertainties, as well as the weakened appetite for emerging markets’ assets are expected to keep market performance down beaten.
A review of market performance last week showed that the NSE’s All-Share Index (ASI) and market capitalisation depreciated by 0.01 per cent to close the week at 31,139.35 points and N11.612 trillion respectively.
Similarly, all other indices finished lower with the exception of the NSE CG, NSE Premium, NSE ASeM, NSE Banking, NSE-AFR Bank Value, NSE AFR Div Yield, NSE Industrial Goods and NSE Pension indices which appreciated by 0.66 per cent, 0.27 per cent, 0.55 per cent, 3.82 per cent, 4.76 per cent, 2.97per cent, 2.42 per cent and 0.71 per cent respectively.
The market had reopened last week Monday on a downward note, as market capitalisation plunged marginally by N7 billion to N11.607 trillion, while ASI lost 17.33 absolute points, representing a dip of 0.06 per cent, closing at 31,125.39 points.
Similarly, at the close of transactions on Tuesday, the market sustained sliding profile, causing the ASI to depreciate by 0.14 per cent, while market capitalisation shed N16 billion, to close at N11.591 trillion.
At the end of transactions on Wednesday, the bearish sentiments persisted on the trading floor of NSE, as more bluechip stocks join the league of the losers, resulting to a further slide in market capitalisation by N15 billion.
Specifically, ASI shed 41.48 absolute points, representing a decline of 0.13 per cent, to close at 31,040.84 points, as market capitalisation lost N15 billion, to close at N11.576 trillion too.
The downturn was impacted by losses recorded in medium and large capitalised stocks, among which were Nestle Nigeria, Beta Glass, Cadbury Nigeria, Stanbic IBTC Holdings and Nigerian Breweries.
The market’s breadth closed negative, recording 14 gainers against 23 losers. Niger Insurance recorded the highest price gain of 9.52 per cent, to close at 23 kobo, per share. Access Bank gained 9.24 per cent to close at N6.50, while Fidelity Bank appreciated by 9.05 per cent to close at N2.41, per share.
Wema Bank appreciated by 4.05 per cent to close at 77 kobo, while UACN went up by 3.90 per cent to close at N8 per share.
On the other hand, Cutix led the losers’ chart by 9.76 per cent, to close at N1.85 per share. Beta Glass followed with a decline of 8.92 per cent to close at N71.95 per share.
Aiico Insurance shed 8.45 to close at 65 kobo, per share. Cadbury Nigeria down by 8.33 per cent to close at N11, while Ikeja Hotel shed 8.24 per cent to close at N1.56, per share.
The total volume traded depreciated by 25.84 per cent to 223.66 million shares, worth N2.16 billion, and traded in 3,419 deals. Transactions in the shares of Access Bank topped the activity chart with 83.2 million shares valued at N529.94 million.
Zenith Bank followed with 22.45 million shares worth N494.67 million, while Fidelity Bank traded 16.32 million shares valued at N38.1 million, as United Bank for Africa (UBA) traded 15.09 million shares valued at N116.08 million and FCMB Group transacted 13.47 million shares worth N26.51 million.
Analysts said the market outlook is gloomy, even as earnings on listed equities remain subdued with negative sentiments due to alleged policy issues.
Analysts at Vetiva Research said: “Despite a positive close on Friday, we highlight that the sentiment in the market still remains weak. On the back of this, we expect seesaw trading next week, as the interplay between bargain hunting and sell-offs continues.”
The Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, added: “As investors look forward to positive economic statement and policy to give direction. Volatility may however continue, as market players adopt the wait-and-see attitude in the face of repositioning for the ongoing 2019-dividend declaration season and relative post-general elections peace to shape market performance in the interim.
“We advise cautious trading and investing while positioning in fundamentally sound equities.
Volatility will also continue as investors and fund managers reposition their portfolios, with eyes fixed on earnings reports.
“But investors should review their positions in line with their investment goals, strength of the company numbers and act as events unfold in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value.”
By Helen Oji
The Guardian Newspaper March 25th, 2019