The downtrend at the Nigerian stock market spiraled to a worse level on Tuesday as mounting sell pressure pushed share prices of most traded stocks to lower levels. With two decliners for every advancer, Nigerian investors lost N180 billion in previous capital gains in five hours of trading at the Nigerian Stock Exchange (NSE).
In a market that saw increasing supply of shares of the most liquid and largest stocks, the increasing sell orders appeared to be weakening the traditional resistance of several highly capitalised stocks.
Dangote Cement, Nigeria’s most capitalised company, led the losers, which also included Guaranty Trust Bank, Nigeria’s most capitalised banking stock and the second largest cement stock, Lafarge Africa Plc.
The All Share Index (ASI), the benchmark index for the Nigerian stock market, declined by 1.95 per cent on Tuesday from 26,887.54 points to close at 26,364.27 points. Aggregate market value of all quoted equities on the NSE also dropped from its opening value of N9.256 trillion to close at N9.076 trillion. Nearly all group and sectoral indices at the stock market also closed negative. The NSE Industrial Goods Index declined by 4.5 per cent. The NSE Oil & Gas Index dropped by 1.3 per cent.
The NSE Banking Index slipped by 1.2 per cent while the NSE Insurance Index declined by 0.4 per cent. However, the NSE Consumer Goods Index appreciated by 0.52 per cent.
With the Tuesday’s decline, the fifth in a row, the negative average year-to-date return spiraled to its highest level in recent weeks at -7.95 per cent, further underlining the risk inherent in equities after a major bank, Access Bank, predicted that inflation rate may trended upward to 18.2 per cent for October as against 17.9 per cent for September.
The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for October 2016 on November 17 2016, based on the data release calendar available on the bureau’s website.
Dangote Cement led the 26-stock losers’ list with a loss of N8.42 to close at N164.01. Forte Oil followed with a loss of N5.98 to close at N113.72. Lafarge Africa declined by N2.74 to close at N52.14. Okomu Oil Palm dropped by N2.30 to close at N44.70. UAC of Nigeria lost 93 kobo to close at N17.67. Flour Mills of Nigeria dropped by 70 kobo to close at N19 per share. Guaranty Trust Bank declined by 46 kobo to N21.40. Unilever Nigeria lost 45 kobo to close at N48.05. Champion Breweries slipped by 25 kobo to close at N2.39 while Cement Company of Northern Nigeria declined by 24 kobo to close at N4.70 per share.
Total turnover stood at 189 million shares valued at N1.60 billion in 3,434 deals. Chams Plc was the most active stock with a turnover of 40.1 million shares valued at N20.05 million. United Bank for Africa followed with 28.6 million shares worth N122.8 million. Transnational Corporation of Nigeria placed third with 18.05 million shares valued at N16.08 million.
On the positive side, Guinness Nigeria led 12 other contrarian stocks with a gain of N2.50 to close at N88.50. Nigerian Breweries followed with a gain of N2 to close at N144. CAP gathered N1.62 to close at N34.02. GlaxoSmithKline Consumer Nigeria added 75 kobo to close at N15.75 while Eterna rose by 14 kobo.
“Given the negative trend in the equities market, we view an opportunity for short-term investors to take advantage of fundamentally sound stocks currently trading at attractive entry prices,” analysts at Afrinvest Securities stated in reference to several equities trading around their lowest prices in a year.
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