The Nigerian stock market started this week with a tinge of profit-taking as investors sought to lock in capital gains on equities that accrued in recent trading sessions.
The stock market had rallied capital gains of N760 billion within the previous three trading sessions after the Central Bank of Nigeria (CBN) last Wednesday announced the framework for the new flexible foreign exchange (forex) policy.
Trading at the Nigerian Stock Exchange (NSE) showed substantial selling sentiments, especially on several stocks that had led the rallies in the previous trading sessions. With caution on the immediate direction of the new forex policy of the apex bank, which started on Monday, demand was muted, leading to closure of most transactions at lower prices.
The CBN on Monday started the implementation of its new forex policy, which removes Naira from previous peg of N197/$ to float in line with market dynamics. The new forex policy is seen as a possible boost to the Nigerian stock market, where foreign investors control about half of transactions.
The Monday trading at the NSE saw a mix of a strong profit-taking with mild bargain-hunting and forex-driven portfolio adjustments. The All Share Index (ASI), the common index that tracks pricing trend at the NSE, indicated average decline of 1.63 per cent, dropping from 29,247.27points to close at 28,769.90 points. Aggregate market value of all quoted equities dropped correspondingly from N10.045 trillion to close at N9.881 trillion.
Pricing trend analysis showed the delicate balancing at the stock market as investors weighed the immediate outlook for the new forex policy. The NSE Banking Index declined by 2.6 per cent. The NSE Consumer Goods Index dropped by 1.7 per cent. The NSE Industrial Goods Index dropped by 1.2 per cent. However, the NSE Insurance Index and NSE Oil & Gas Index appreciated by 0.6 per cent each.
There were 33 losers against 17 gainers. Nigerian Breweries led the losers with a loss of N7.44 to close at N141.42. Guinness Nigeria followed with a loss of N4.10 to close at N99.90. Dangote Cement declined by N3.82 to close at N179.99. PZ Cussons Nigeria dropped by N1.09 to close at N21.11. Ecobank Transnational Incorporated lost 85 kobo to close at N16.15. Zenith Bank declined by 69 kobo to N15.96. Unilever Nigeria dropped by 60 kobo to N32.10. Dangote Sugar Refinery lost 34 kobo to close at N6.66. Stanbic IBTC declined by 32 kobo to close at N15.90 while Berger Paints lost 29 kobo to close at N7.31.
Total turnover stood at 416.66 million shares valued at N2.25 billion in 4,684 deals. FBN Holdings was the most active stock with a turnover of 88.30 million shares valued at N382.74 million. United Bank for Africa followed with a turnover of 59.49 million shares worth N286.9 million while Diamond Bank placed third with a turnover of 55.27 million shares valued at N122.03 million.
On the positive side. Nestle Nigeria led the contrarian stocks with a gain of N37.85 to close at N794.88. Total Nigeria added N3.99 to close at N177. Forte Oil rose by N2 to close at N200. GlaxoSmithKline Consumer rose by 78 kobo to N15 while International Breweries added 56 kobo to close at N19.99.
“Despite today’s profit taking, we do not expect negative sentiments to be sustained as domestic investors will attempt early bird positioning in expectation of foreign investors’ return to the market,” Afrinvest Securities, a Lagos-based dealer on the NSE, stated on the outlook for the next trading session.
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