NSE LIVE! Equities hit three-year low amidst continuing sell offs

Nigerian equities dropped to a three-year low on Monday as continuing decline brought the average year-to-date return to -20.98 per cent.
The benchmark index for the Nigerian stock market, the All Share Index (ASI) of the Nigerian Stock Exchange (NSE), dropped from its opening index of 27,617.45 points to close Monday at 27,385.69 points, its lowest point since December 2012.
Aggregate market value of all quoted equities also declined from N9.495 trillion to close at N9.416 trillion. With 37 losers to 21 gainers, the stock market remained under considerable sell pressure, which has been worsened by tight domestic economic condition and the foreign exchange crisis.
The day-on-day loss of 0.84 per cent yesterday worsened the negative average year-to-date return to -20.98 per cent. In November alone, investors lost an average of 6.14 per cent of their portfolios.
All sectoral indices, with the exception of the insurance sector’s index, suffered depreciation, underlining the wide spread of the downtrend. The NSE Oil & Gas Index depreciated by -2.8 per cent. The NSE Consumer Goods Index declined by 0.9 per cent. The NSE Banking Index slipped by 0.7 per cent while the NSE Industrial Goods Index fell by 0.2 per cent. However, the NSE Insurance Index inched up by 0.3 per cent.
“Given the sustained decline on the Nigerian bourse, we advise investors to maintain a medium to long term position in equities,” said analysts at Afrinvest Securities.
The decline was driven by losses suffered by highly capitalised stocks in the oil and gas and breweries sectors. Forte Oil recorded the highest loss of N13.77 to close at N261.73. Seplat Petroleum Development Company followed with a loss of N5.10 to close at N217. Mobil Oil Nigeria dropped by N3.99 to close at N126.01. Guinness Nigeria lost N2 to close at N121 while Unilever Nigeria dropped by N1.84 to close at N38.06.
The sell down was also noticeable in the above-average turnover. Investors traded a total of 319.78 million shares worth N3.01 billion in 3,098 deals.
But the Chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said the steep decline has created significant buy opportunities for discerning investors.
He noted that the fundamentals of quoted companies remain strong and investors must not be disillusioned by the current decline in share prices to miss out the opportunities for good investments currently in the market.
According to him, while there has been no respite in the macro economy and operating environment due to lingering oil price and foreign exchange pressures, the long-term outlook for the stock market remains positive as listed companies continue to show resilience and stockbrokers have been repositioned to deliver superior value to investors.
He pointed out that investors should look at the global picture of the macro and micro reasons for the current depression, noting 20 of the 24 Exchanges in Africa are experiencing a downturn while other advanced and emerging markets have seen steep fluctuations.
“Opportunities still exist for investors in stocks, in spite of the current downturn in the capital market. If you look at large, mid and small cap securities; mid cap securities have done well, they have returned about six per cent positive. Now the whole market is about 18 per cent down and that is because of the weight of the large-cap securities. So, it is important for investors to dig deeper and understand the dynamics of the market. Investors also need to understand that there have been significant sell-offs between last year and this year and it could present opportunity,” Onyema said.
He advised investors to diversify their portfolios within sectors in the equities market and beyond equities into other various asset classes in order to mitigate risks.

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