Nigerian equities started this week on a near free fall as anxiety gripped investors over the fate of Skye Bank Plc amidst concerns over the second quarter corporate earnings.
With more than three decliners for every advancer, losses significantly outweighed gains and most large-cap stocks fell under massive sell-off.
The market closed with a net loss of N104 billion, its third consecutive negative performance and sixth negative performance within the past seven trading sessions. The Central Bank of Nigeria (CBN) on Monday sacked the board and management of Skye Bank, over alleged non-performance and continuing deterioration in the operations of the bank. Skye Bank is quoted on the Nigerian Stock Exchange (NSE).
While the apex bank gave assurance that the board and management changes were not takeover and not signs that the Skye Bank was in distress, past experiences, the general import of the statement of the apex bank and indicting statements on the bank’s liquidity and capital adequacy created panics in the market.
Investors had lost three quoted banks-Afribank Nigeria, Bank PHB and Spring Bank, to similar takeover and management changes. Ironically, Skye Bank acquired the remnants of the former Afribank Nigeria, renamed Mianstreet Bank Limited, from the Asset Management Corporation of Nigeria (AMCON).
Skye Bank’s share price dropped by 9.52 per cent to 95 kobo in frenzied sale of the shares with many analysts expecting further decline in the price of the bank as investors scurried for exit.
The All Share Index (ASI), the main index for the Nigerian stock market, dropped from its opening index of 29,305.40 points to close at 29,002.06 points, representing a decline of 1.04 per cent. Aggregate market value of all quoted equities also declined from N10.065 trillion to close at N9.961 trillion, indicating a loss of N104 billion. The sustained depreciation has reduced the average year-to-date return to a marginal 1.26 per cent.
All sectoral and group indices closed in the red, underlining the widespread negative sentiments across the sectors. The NSE Industrial Goods Index depreciated by 2.1 per cent. The NSE Banking Index dropped by 1.1 per cent. The NSE Consumer Goods Index declined by 0.9 per cent. The NSE Insurance Index and NSE Oil & Gas Index lost 0.8 per cent each.
While there were still sale orders, actual turnover dropped as shareholders held back from selling and buying. Total turnover dropped below recent average to 142.83 million shares valued at N1.35 billion in 3,321 deals. Banks dominated the activities chart. FBN Holdings was the most active with 21.79 million shares worth N83.12 million. Zenith International Bank placed second with 12.51 million shares valued at N189.69 million while Access Bank traded 11.69 million shares worth N66.19 million.
Forte Oil led the 31-stock losers’ list with a loss of N9.51 to close at N180.83. Total Nigeria dropped by N8.52 to close at N181.48. Guinness Nigeria lost N5.47 to close at N99.50. Lafarge Africa declined by N3 to close at N67. Nigerian Breweries lost N1.10 to close at N130 while Dangote Cement lost 99 kobo to close at N191.
On the other hand, Oando led the 10-stock gainers’ list with a gain of 68 kobo to close at N7.37. Vanleer Containers followed with a gain of 46 kobo to close at N9.69 while Red Star Express dropped by 21 kobo to N4.51 per share.
“We expect market performance to remain soft on Thursday. However, we do not rule out a rebound at the end of the week as investors hunt for bargains in stocks currently being dumped in the market amid second quarter earnings expectation,” Afrinvest Securities, which trades on the NSE, stated.
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