Economy: Equities lose N701bn in October crash

Investors in the Nigerian stock market lost N701 billion in October as share prices of quoted equities continued to fall in spite of the inflow of much expected third quarter earnings of companies and the impending constitution of the executive cabinet of President Muhammadu Buhari.
While many had hoped that the last quarter would see a stem of the negative tide that had ruled the market for the most part of this year, the immediate past month appeared to have set the fourth quarter on a negative footing, worsening the average year-to-date performance.
Several quoted companies open today at their lowest prices in the past one year while a large segment of stocks have stagnated at nominal value, underlining the widespread downtrend at the stock market.
Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) closed October at N10.028 trillion as against its opening value of N10.729 trillion for the month, representing a loss of N701 billion.
The benchmark index at the NSE, the All Share Index (ASI) closed at the weekend at 29,177.72 points as against its opening index of 31,217.77 points for the month, representing a decline of 6.53 per cent. The ASI, a value-based common index that tracks prices of all quoted equities on the NSE, doubles as Nigeria’s sovereign equity index and is used in competitive global evaluation of stock market returns.
In the last week of the month, the ASI depreciated by 2.78 per cent. There were 51 decliners to 12 gainers while 127 stocks closed flat. Increased supply fuelled momentum of activities, albeit on the negative side, as turnover rose to 1.358 billion shares worth N14.722 billion in 14,772 deals last week as against a total of 992.719 million shares valued at N13.121 billion traded in 14,252 deals two weeks ago.
Year-to-date analysis indicated that average investors might have lost 15.81 per cent of their investments in the first 10 months of this year, which aggregated to a total market loss of approximately N1.5 trillion. Aggregate market value of quoted companies on the Nigerian Stock Exchange (NSE) closed October at N10.028 trillion, representing a loss of N1.45 trillion or 12.63 per cent from the year’s opening value of N11.478 trillion.
The ASI closed at the weekend at 29,177.72 points as against its opening index of 34,657.15 points for the year, representing a decline of 15.81 per cent. With inflation rate at 9.4 per cent, inflation-adjusted average year-to-date return at the Nigerian stock market now stands at -25.21 per cent, simply implying that average investors have lost more than a quarter of the real value of their investments.
Several equities across the sectors closed at their lowest prices in the past one year including Julius Berger Nigeria, Oando, Eterna, Northern Nigerian Flour Mills, MRS Oil and Gas, Scoa Nigeria, Transnational Corporation of Nigeria, Dangote Flour Mills, International Breweries and UACN Property Development Company (UPDC) among others.

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Most stocks in the top-league sectors of banking, insurance, healthcare, oil and gas, and food and beverages sectors are trading around their lowest prices over the 52-week period. These included leading stocks such as UAC of Nigeria, Flour Mills of Nigeria, Cadbury Nigeria, Access Bank, FBN Holdings, Union Bank of Nigeria, Diamond Bank, Fidelity Bank, Seplat Petroleum Development Company, May & Baker Nigeria and Skye Bank Plc among others. More than a quarter of quoted stocks, especially in the largely dormant insurance and other non-banking financial services sectors, have stagnated at nominal value, in most cases 50 kobo.
The performance so far is hitting hard investors, who had been at the top-end of the global decline last year. Nigerian equities had ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N11.477 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.
Against the opening value for 2014, the current market value of all quoted equities represents a loss of N3.2 trillion over the 22-month period.
Sectoral analysis showed widespread losses. The NSE Premium Index, which tracks the trio of Dangote Cement, FBN Holdings and Zenith Bank International, indicated a 10-month return of -14.10 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks on the NSE, recorded average decline of 15.57 per cent. The NSE Pension Index, which tracks 40 stocks specially screened for pension investments, indicated average return of -13.70 per cent. Others returns included NSE Banking Index, -12.15 per cent; NSE Insurance Index, -6.63 per cent; NSE Consumer Goods Index, -17.20 per cent; NSE Oil and Gas Index, -10.54 per cent; NSE Industrial Goods Index, -1.67 per cent while NSE Main Board Index and NSE Lotus Islamic Index recorded -15.09 per cent and -12.64 per cent respectively.

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