NSE LIVE! Equities slump as inflation worsens return

in from Success Allantee … .
Nigerian equities suffered a major reversal yesterday as the National Bureau of Statistics (NBS) announced another rise in inflation rate to 9.4 per cent. The spread and depth of the downtrend at the stock market widened as investors reacted to the inflationary trend amidst concerns that future rise could worsen returns at the volatile stock market.
NBS stated that inflation rate rose from 9.3 per cent in August to 9.4 per cent in September, the eighth increase in the past nine months.
The mild downtrend that started on Tuesday subsequently turned into a steep decline, with the benchmark indices sloping to the very low ends of the pricing curves. The All Share Index (ASI) – the value-based index that tracks prices of all quoted companies on the Nigerian Stock Exchange (NSE), declined by 1.30 per cent to close below its psychological threshold of 30,000 points. The ASI dropped from 30,058.40 points to close at 29,667.24 points.
Aggregate market value of all quoted equities also dropped correspondingly from N10.330 trillion to close at N10.196 trillion, indicating a loss of N134 billion. The decline yesterday pushed the average year-to-date return at the stock market to -14.40 per cent.
With inflation rate at 9.4 per cent for September, average year-to-date inflation-adjusted return has risen to 23.8 per cent, doubling investors’ losses, a trend that could further dampen investors’ appetite and orchestrated flow of funds to inflation-hedged instruments and other negative but less volatile securities.
Most sectoral indices indicated widespread negative sentiments. The NSE Banking Index recorded the highest loss of 1.6 per cent. The NSE Industrial Goods Index followed with a drop of 1.1 per cent. The NSE Oil & Gas Index declined by 0.7 per cent while the NSE Consumer Goods Index slipped by 0.6 per cent. The NSE Insurance Index played the contrarian index with a modest gain of 0.2 per cent.
“With the constant losses being recorded on the bourse, we believe the stock market is moving deeper into a bears’ market,” analysts at Afrinvest Securities stated, but quickly added that third quarter results might drive gains in the days ahead.
Total Nigeria led the 27-stock losers’ list with a drop of N4.89 to close at N150.01. Dangote Cement followed with a loss of N4 to close at N160. UAC of Nigeria declined by N1.71 to close at N25.75. Nigerian Breweries dropped by N1.50 to close at N135. PZ Cussons Nigeria lost N1 to close at N24. Guaranty Trust Bank declined by 64 kobo to close at N23.36. Oando dropped by 49 kobo to close at N9.51. Union Bank of Nigeria slipped by 29 kobo to N5.70 while Access Bank and United Bank for Africa dropped by 25 kobo and 22 kobo to close at N4.81 and N4.18 respectively.
Total turnover stood at 160.61 million shares valued at N1.65 billion in 3,270 deals.

Read also: NSE LIVE! Equities in tight trade as high-cap stocks upset rally

Transnational Corporation of Nigeria was the most active stock with a turnover of 26.85 million shares valued at N57.35 million in 113 deals. United Bank for Africa followed with a turnover of 20.04 million shares worth N84.3 million in 90 deals. Ecobank Transnational Incorporated placed third with a turnover of 12.69 million shares worth N234.76 million in 39 deals.
On the positive side, 19 stocks recorded gains, led by Mobil Oil Nigeria, which rose by N7.50 to close at N159. Okomu Oil Palm chalked up N3 to close at N32.40. Unilever Nigeria added 50 kobo to close at N47. Nascon Allied Industries gathered 36 kobo to close at N7.66 while Lafarge Africa rose by 27 kobo to close at N98.54 per share.

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