NSE LIVE! Equities lose N312b on JP Morgan exclusion

The Nigerian stock market expectedly reacted sharply but negatively to Tuesday’s announcement of the delisting of Nigerian government bonds from the JP Morgan’s emerging markets bond index (GBI-EM).  Quoted equities halted a three-day consecutive rally and sharply turned negative as investors weighed in the consequences of the October delisting.

With 46 losers to nine gainers, all indices at the Nigerian Stock Exchange (NSE) closed in the red as investors panicked for the exit. Aggregate market value of all quoted equities dropped from N10.440 trillion to close at N10.129 trillion, representing a loss of N312 billion.

The All Share Index (ASI), which doubles as NSE’s benchmark index and Nigeria’s sovereign equity index, also slumped by 2.99 per cent to close at 29,454.09 points compared with its opening index of 30,358.87 points. The downtrend yesterday further worsened the negative average year-to-date loss to -15.01 per cent.

“We believe trading activities today (Wednesday) were largely driven by panic in the market due to JP Morgan’s announcement to begin the de-listing of Nigerian Government Bonds from its emerging markets bond Index (GBI-EM) by 30th September, 2015,” Afrinvest Securities stated.

Cowry Assets Management Cowry Asset said the steep decline was “an  apparent  response  to  the  recent  announcement that  Nigerian  local currency  bonds  will  be  removed  from  JP  Morgan’s  Government  Bond  Index for Emerging Markets (GBI-EM)”.

Analysis of key sectoral indices showed widespread losses across the counter. The NSE banking sector dropped by -3.9 per cent. The NSE Industrial Index also declined 2.5 per cent while the NSE Oil & Gas Index, the NSE Consumer Goods Index and NSE Insurance Index declined by about 2.2 per cent, 2.1 per cent and 1.9 per cent respectively.

Nestle Nigeria topped the losers’ list with a drop of N18 to close at N802. Mobil Oil Nigeria declined by N7.50 to close at N142.50. Dangote Cement dropped by N6.94 to close at N163.06. Nigerian Breweries depreciated by N4.87 to close at N123.18. UAC of Nigeria lost N1.70 to close at N32.30. Julius Berger Nigeria  dropped by N1.50 to close at N42 while Conoil declined by N1.35 to close at N25.78 per share.

Analysts at Afrinvest Securities said the sell-off triggered the downtrend may persist in the meantime as investors continue to react to the exclusion. “We believe today’s performance was primarily related to the immediate reaction to the announcement by JP Morgan to remove Nigeria from its GBI-EM index, thus we imagine that sell offs may persist in the interim. Pending information that may change investor sentiments towards the market, we advise investors to trade cautiously,” Afrinvest Securities stated.

Aggregate turnover stood at 459.46 million shares valued at N4.29 billion in 3399 deals. Diamond Bank was the most active stock with a turnover of 141.33 million shares valued at N487.66 million in 55 deals.

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