Equity investors celebrate Nigeria’s independence with N140bn loss

Following two consecutive weeks of gains recorded on the floor of the Nigerian Stock Exchange (NSE), the stock market this week closed on a bearish note, even as the Federal Government declared Monday public holiday to celebrate the nation’s 58th Independence Anniversary.

This week’s negative performance was in continuation of the bearish trend which started in February, 2018 as a result of profit taking activity on market bellwethers and developments in the nation’s political space, including parties’ primaries ahead of the 2019 general elections.

The losses, in a broader sense, could also be linked to the continued divestment of portfolio assets by foreign investors from emerging and frontier markets, which include Nigeria, to advanced economies like United States where FED Reserve kept raising interest rate.

However, analysts at Afrinvest Securities envisaged an upsurge in equities performance once the ongoing political apprehensions settle.

“With no potential driver in the short term, we believe trading activities will remain largely shaped by speculative trading activities,” the analysts said.

The key performance indicator of the NSE, the All-Share Index (ASI), in the holiday-shortened week closed the remaining four trading sessions in red, depreciating on a week-on-week basis by 117 basis points to 32,383.15 points, while the Year-to-Date loss of the ASI worsened to -15.37 percent.

Equity investors lost a total of N140 billion during the independence week as market capitalisation of equities traded at the bourse, which opened on Tuesday at N11.96 trillion, closed at N11.82 trillion last Friday.

Consequently, activity level weakened during the week as the volume and value of equities transactions fell by 31.22 percent and 44.75 percent to 639.32 million units of shares and N7.84 billion, respectively.

Despite the negative trend, investors’ sentiment slightly improved – though still weak – during the week as 27 stocks advanced against 31 that declined.

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Sector performance was largely bearish as all sector indices under our coverage dropped during the week with the exemption of NSE Oil & Gas index that rose by 1.13 percent.

Cutix, Forte Oil, Japaul Oil and Maritime Services, AIICO Insurance, and U A C N were the major advancers during the week rising by 15.37 percent, 10.22 percent, 9.09 percent, 7.79 percent, 7. 48 percent to close at 63 Kobo, N2.05, 2 Kobo, 6 Kobo, and 80 Kobo per share, respectively.

On the other hand, Nigeria Insurance, Law Union and Rock Insurance, Neimeth International Pharmaceutical Company, UACN Property Development Company and Royal Exchange were the greatest losers during the week under review, falling by 18.92 percent, 15.38 percent, 10.61 percent, 9.74 percent, 9.09 percent to close at 7 Kobo, 10 Kobo, 7 Kobo, 19 Kobo, and 2 Kobo per share, respectively.

 

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