Business
NSE LIVE! Equities’ return worsens amidst inflation push
In from Success Allantee…
The return outlook for Nigerian equities worsened yesterday (Tuesday) as the downtrend at the Nigerian Stock Exchange (NSE) entered the 10th consecutive trading session. The benchmark indices at the NSE indicated average day-on-day decline of 0.81 per cent yesterday, on a day that the Nigerian Bureau of Statistics (NBS) announced that inflation surpassed Central Bank of Nigeria (CBN)’s target to 9.2 per cent in June as against 9.0 per cent in May.
With inflation rate now at 9.2 per cent and average year-to-date return at the NSE at -9.48 per cent, inflation-adjusted return at the stock market worsened to about -18.7 per cent. The All Share Index (ASI), the composite value-based index that tracks prices of all quoted stocks, declined to a low of 31,372.90 points as against its opening index of 31,628.20 points. Aggregate market capitalization of all quoted equities dropped by N87 billion from N10.802 trillion to N10.715 trillion.
Analysts at Afrinvest Securities said rising inflation could further worsened market’s return outlook. “This portends further weakness of the fundamentals of the Nigerian economy which already has a cocktail of macroeconomic issues. Investors’ sentiments are likely to wane as real return on investments shrinks further,” Afrinvest Securities stated.
Analysts added that the recent move by the Central Bank of Nigeria (CBN) to further stabilize foreign exchange rate and conserve the reserve may however pressure inflation rate northwards noting that the CBN’s ban on importers of 41 items from gaining access to the official foreign exchange markets and the continued fuel scarcity are expected to further push July inflation rate upwards.
There were 36 losers against eight gainers yesterday, highlighting the supply glut that had forced several stocks to trade at discount.
“We do not anticipate any change from the current bearish market mood,” analysts at SCM Capital said in post trading review.
Seven-Up Bottling Company topped the losers’ list with a loss of N8 to close at N181. Presco declined by N1.70 to close at N32.30. Flour Mills of Nigeria dropped by N1.49 to close at N29.20. Stanbic IBTC Holdings slipped by 95 kobo to close at N24. Okomu Oil Palm lost 84 kobo to close at N27.16. Nigerian Breweries declined by 80 kobo to close at N133.50. Zenith Bank lost 75 kobo to close at N18.13. Oando declined by 69 kobo to close at N13.27 while Guaranty Trust Bank and Nascon Industries Plc dropped by 40 kobo and 37 kobo to close at N25.70 and N7.08 respectively.
However, Mobil Oil Nigeria led the contrarian stocks with a gain of N7.35 to close at N154.35. Ecobank Transnational Incorporated rose by 55 kobo to close at N21. Caverton Offshore Services Group added 14 kobo to close at N3.69. Guinness Nigeria rose by 11 kobo to N139.91 while United Bank for Africa gathered 10 kobo to close at N4.30 per share.
Read also: NSE LIVE! Equities’ return worsens on 9th negative trade
Total turnover stood at 277.09 million shares worth N4.46 billion in 3,646 deals. The financial services sector accounted for 217.72 million shares valued at N2.69 billion in 2,082 deals. Zenith Bank was the most active stock with a turnover of 118.36 million shares valued at N2.19 billion in 295 deals. Access Bank placed a distant second with a turnover of 23.10 million shares worth N115.5 million in 246 deals. Transnational Corporation of Nigeria ranked third with a turnover of 13.7 million shares valued at N31.7 million in 159 deals.
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