After losing N117 billion in August, Nigerian equities opened the ninth month with a loss of N34 billion as liquidity squeeze continued to drive sell down at the stock market.
As the stock market reopened on Tuesday after the public holidays for the Muslims’ festival of Eid-ul-Adha, most equities at the Nigerian Stock Exchange (NSE) traded on the negative.
The benchmark indices at the Exchange indicated average day-on-day decline of 0.28 per cent, representing net capital loss of N34 billion within the five-hour trading session on Tuesday. The decline pared the average year-to-date return to 31.74 per cent.
The market performance belied the cheering news of Nigeria’s exiting of economic recession with a Gross Domestic Product (GDP) growth of 3.2 per cent in the second quarter compared with the first quarter. The National Bureau of Statistics (NBS) indicated that the economy grew by 0.55 per cent on year-on-year basis. The growth was driven by both the oil sector and non-oil sector which grew by 1.6 per cent and 0.5 per cent in second quarter of 2017 compared with the corresponding period of 2016.
Aggregate market value of all quoted equities on the NSE dropped from its opening value of N12.237 trillion to close at N12.203 trillion. The All Share Index (ASI)-the main index that tracks share prices at the Exchange, declined from 35,504.62 points to close at 35,403.92 points.
With 24 decliners to 21 advancers, the negative market performance was driven by market-wide selloff, especially in large-cap stocks in the oil and gas and industrial goods sectors. All sectoral indices at the Exchange closed negative with the exception of the NSE Insurance Index, which rose marginally by 0.1 per cent.
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The NSE Oil & Gas Index depreciated by 3.0 per cent. The NSE Industrial Goods Index declined by 2.1 per cent. The NSE Consumer Goods Index dropped by 0.3 per cent while the NSE Banking Index dipped by 0.1 per cent.
Seplat Petroleum Development Company led the decliners with a drop of N24.52 to close at N465.98. Total Nigeria dropped by N12 to close at N233. Lafarge Africa lost N2.84 to close at N54.14. Seven-Up Bottling Company declined by N2 to close at N90 while Julius Berger Nigeria dropped by N1.62 to close at N30.87 per share.
Total turnover was around average with the exchange of 230.03 million shares valued at N4.77 billion in 4,188 deals. The three most active stocks were Access Bank, with 63.29 million shares; United Bank for Africa (UBA), 27.61 million shares and Zenith Bank, which recorded 17.84 million shares.
On the positive side, Guinness Nigeria, which announced a dividend per share of 65 kobo on Tuesday, recorded the highest gain of N3.77 to close at N79.27. Mobil Oil Nigeria followed with a gain of N2.39 to close at N167.50. Conoil rose by N1.30 to close at N29. Forte Oil added 70 kobo to close at N49.70 while FBN Holdings chalked up 28 kobo to close at N5.98 per share.
“We are of the view that today (Tuesday)’s performance was dragged by sustained sell sentiment in value stocks. However, we do not believe the downtrend will persist beyond the short term as positive developments in macroeconomic fundamentals are expected to bolster investors’ appetite for equities,” Analysts at Afrinvest Securities stated.
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