NSE LIVE! Investors shift to penny stocks amidst mounting losses

Investors appeared to be increasingly shifting towards low-priced equities, otherwise known as penny-stocks, as the new cycle of price depreciation continued to show considerable sell pressure on highly capitalised stocks in favour of low-priced equities.

The portfolio rebalancing in favour of low-priced stocks, which has so far dominated trading cycles in the new month, was predominant on Thursday at the Nigerian Stock Exchange (NSE). The three most active stocks traded below N1. The shift towards penny stocks underlined investment philosophy that sees value-based penny stocks as the quickest and biggest gainers in the event of a market recovery.

May & Baker Nigeria, which opened trading at 84 kobo and rose on demand to close at 88 kobo, was the most active stock in the five-hour trading session with a turnover of 23.43 million shares valued at N20.6 million. Sterling Bank, which closed at 83 kobo, placed second with 8.79 million shares worth N7.29 million while Transnational Corporation of Nigeria (Transcorp), which traded last at 92 kobo, ranked third with a turnover of 8.3 million shares valued at N7.73 million.

Altogether, total turnover stood at 112.52 million shares worth N2.36 billion in 2,684 deals, indicating a slowdown in the momentum of activities as the market situation became increasingly tight. The number of decliners widened on Thursday as sell pressure mounted on highly capitalised stocks. These shaved off N62 billion from market value of quoted equities, equivalent to average decline of 0.66 per cent.

Aggregate market value of all quoted equities on the NSE declined from its opening value of N9.351 trillion to close at N9.289 trillion, indicating a loss of N62 billion. The All Share Index (ASI), the common value-based benchmark index that tracks prices at the NSE, also declined from index-on-board of 27,223.08 points to close at 27,044.36 points.

Most sectoral indices closed in the negative, underlining the spread of the losing streak. The NSE Industrial Goods Index dropped by 0.8 per cent. The NSE Consumer Goods Index declined by 0.6 per cent while the NSE Oil & Gas Index slipped by 0.1 per cent. However, the NSE Insurance Index improved by 0.5 per cent while the NSE Banking Index appreciated by 0.1 per cent.

Dangote Cement, the most capitalised stock at the NSE, led the losers with a loss of N2.57 to close at N172.43. Nigerian Breweries, the second most capitalised stock, followed with a loss of N2.14 to close at N142.86. Ashaka Cement dropped by N1.19 to close at N11.07.

Read also: NSE LIVE! High-cap stocks depress equities

Nascon Allied Industries declined by 39 kobo to close at N7.61. Ecobank Transnational Incorporated dropped by 38 kobo to close at N9.80. Forte Oil lost 30 kobo to close at N119.70. University Press dropped by 21 kobo to close at N4.09. UACN Property Development Company declined by 14 kobo to close at N2.80 while Guaranty Trust bank lost 10 kobo to close at N23.50 per share.

On the positive side, Zenith Bank recorded the highest gain of 29 kobo to close at N15.10. PZ Cussons Nigeria followed with a gain of 25 kobo to close at N18. Nigerian Aviation Handling Company rose by 10 kobo to close at N2.70. Honeywell Flour Mills added 9.0 kobo to close at N1.23 while AXA Mansard Insurance inched up by 5.0 kobo to close at N1.98 per share.

“We expect the market to trade sideways in the interim, as investors take action on stocks following the lacklustre earnings season whilst positioning ahead of expected rally in December,” Lagos-based Afrinvest Securities stated.

 

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