NSE LIVE! Equities slump to 37-month low

The downtrend at the Nigerian stock marline worsened on Wednesday as another steep decline in the price of crude oil raised anxieties over the vulnerability of the Nigerian fiscal position.

The benchmark indices at the Nigerian Stock Exchange (NSE) indicated a day-on-day decline of 1.92 per cent, equivalent to a loss of N181 billion. Nigerian equities had on Tuesday lost N104 billion as average return dropped by 1.08 per cent.

The downtrend on Wednesday came as Brent crude oil price dropped by 1.95 per cent to $43, five basis points above the $38 per barrel benchmark set for the Nigerian N6 trillion 2016 budget. Crude oil revenue accounts for about 85 per cent of Nigeria’s national incomes.

The All Share Index (ASI)-the value-based common-share index that tracks prices of all quoted stocks, declined by 1.92 per cent from 27,533.03 points to close at 27,004.50 points, its lowest point in the past 37 months. Aggregate market capitalization value of all quoted equities on the NSE slumped from N9.466 trillion to close at N9.285 trillion, indicating a loss of N181 billion. With the downturn again on Wednesday, the negative average year-to-date return at the stock market rose to -22.08 per cent.

Most other sectoral indices showed widespread declines. The NSE Industrial Goods Index dropped by 2.6 per cent. The NSE Consumer Goods Index declined by 0.6 per cent while the NSE Insurance Index slipped by 0.3 per cent. However, the NSE Oil & Gas Index rose by 0.9 per cent.

Afrinvest Securities, a securities-trading firm on the NSE, attributed the downtrend to waning investors’ appetites due to the ongoing decline in crude oil prices, which has sparked concerns on Nigeria’s fiscal viability and macroeconomic fundamentals.

“As outlook for the oil market remains bearish, strong policy responses from fiscal and monetary mangers to adjust to the reality of a lower oil revenue environment are medium term factors that could lead to an improvement in sentiments. In the interim, our short term outlook for the market remains bearish although we anticipate that bargain hunting might result in a mild uptrend in the trading session ahead,” analysts at Afrinvest Securities stated in post-trading review.

According to analysts, OPEC’s decision to abandon its production quota which has led to a further decline in oil prices seemed to have fuelled the renewed sell pressure on Nigerian stocks.

The momentum of activities also declined. Total turnover stood at 240.8 million shares valued at N2.41 billion in 3,073 deals. Banking stocks continued to dominate activities chart. Zenith Bank was the most active stock with a turnover of 64.3 million shares worth N856.04 million in 590 deals. United Bank for Africa (UBA) staged a distant second with a turnover of 35.6 million shares worth N133.2 million in 171 deals. Access Bank placed third with a turnover of 26.84 million shares valued at N129.1 million in 88 deals.

Read also: NSE LIVE! Equities lose N104b as selling pressure mounts

Dangote Cement, the most capitalised stock at the stock market, led the 24-stock losers’ list with a loss of N8.53 to close at N162.19. Guinness Nigeria recorded a loss of N1.90 to close at N123. Nigerian Breweries, the second most capitalised stock at the market, lost 99 kobo to close at N112.01. Cadbury Nigeria declined by 98 kobo to close at N18.68. GlaxoSmithKline Consumer Nigeria lost 66 kobo to close at N36. PZ Cussons Nigeria dipped by 50 kobo to close at N26.50. Guaranty Trust Bank lost 37 kobo to close at N18.53. Zenith Bank declined by 35 kobo to close at N14 while Ecobank Transnational Incorporated and Fidson Healthcare lost 14 kobo each to close at N16 and N2.69 respectively.

On the upside, Seplat Petroleum Development Company led 14 other contrarian stocks with a gain of N10.35 to close at N217.35 per share. International Breweries followed with a gain of 39 kobo to close at N15.50. Ikeja Hotel rallied 14 kobo to close at N3.14. Red Star Express added 10 kobo to close at N4.20 while Access Bank gained 9.0 kobo to close higher at N4.91 per share.

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