NSE LIVE! Banks hard hit as equities lose N2.79tn in 11 months

Investors in most banking stocks are the worst hit in the scary N2.8 trillion loss at the Nigerian stock market over the past 11 months.

With the exception of three banks -Guaranty Trust Bank (GTB), United Bank for Africa (UBA) and Access Bank, investors in all other banking stocks were in losses over the past 11 months.

An 11-month year-to-date review by Ripples showed that banking stocks were the worst as a sectoral group with average loss as high as 68 per cent within the period compared with the overall market’s average decline of 11.87 per cent.

Troubled bank, Skye Bank, whose management and board were sacked and replaced by the Central Bank of Nigeria (CBN), was atop the banking losing cycle with 11-month price depreciation of 68.4 per cent. Sterling Bank followed with a loss of 61.8 per cent. Diamond Bank declined by 59.6 per cent. Unity Bank recorded 11-month decline of 52.7 per cent. Fidelity Bank dropped by 47.3 per cent.

Wema Bank lost 46 per cent of its market value. Ecobank Transnational Incorporated declined by 41.3 per cent. FCMB Group dropped by 40.24 per cent. First Bank’s FBN Holdings dropped by 39.6 per cent while Union Bank of Nigeria declined by 35.07 per cent. The three exceptions in the banking stocks-GTB, UBA and Access Bank, had gained 24.6 per cent, 27.2 per cent and 12.4 per cent respectively.

The other sectoral group with a proportionately general depression is the cement group, where all stocks closed in the negative. Average loss in the cement group stood at more than 43 per cent. Gombe-based, Lafarge-owned Ashaka Cement topped the list with a loss of 56 .0 per cent. Lafarge Africa followed with a loss of 55.9 per cent. Sokoto-based Cement Company of Northern Nigeria dropped by 52.1 per cent while the group and stock market’s biggest company, Dangote Cement, showed more restraint with a loss of 9.4 per cent.

Forte Oil, the hitherto lead contrarian stock with three-digit rise, is leading the market down the slope with a whooping loss of 83.7 per cent of its market value in 11 months. Other major decliners included UACN Property Development, -61.6 per cent; Honeywell Flour Mills, -51.2 per cent; Vitafoam Nigeria, -55.6 per cent; PZ Cussons Nigeria, -40.9 per cent; GlaxoSmithKline Consumer Nigeria, -59.1 per cent; Portland Paints and Products Nigeria, -59.8 per cent and Fidson Healthcare, which has lost 41.6 per cent of its market value.

Nigerian equities lost N2.79 trillion within the first 11 months of this year as tough macroeconomic environment characterized by rising inflation, declining Gross Domestic Products (GDP) and improbable foreign exchange exacerbated major selloff of quoted shares.

Read also: NSE LIVE! Equities lose N30b as selloff continues

Year-to-date analysis for the 11-month ended November 30, 2016 indicated that average investors might have lost 11.87 per cent of their investments in the first 11 months of this year, which aggregated to a total market loss of approximately N2.79 trillion. Aggregate market value of quoted companies opened 2016 at N11.478 trillion. The ASI opened the year at 34,657.15 points.

Nigerian equities lost a whooping N1.34 trillion in November. The loss of N1.34 trillion in November compounded the losing streak, with investor losing N701 billion in October. The benchmark index at the Nigerian Stock Exchange (NSE) indicated average month-on-month decline of 13.49 per cent in November.

Aggregate market value of all quoted equities closed November at N8.689 trillion as against the month’s opening value of N10.028 trillion. The All Share Index (ASI), the value-based index that tracks prices at the Exchange, dropped from the month’s opening index of 29,177.72 points to close the month at 25,241.63 points.

Equities had 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. 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 fourth quarter has so far been dominated by negative sentiments.

Several quoted companies have continued to hit 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.

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.

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.

 

 

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