Nigerian equities extended their losing streak to the sixth consecutive trading session as Wednesday emergence of Republican Donald Trump as the President of United States of America (USA) sent shocks across the advanced and emerging markets.
The benchmark indices for the Nigerian stock market indicated average decline of 0.72 per cent, equivalent to a loss of N66 billion, bring total loss so far this week to N278 billion. The All Share Index (ASI), the common value-based index that tracks prices at the Nigerian Stock Exchange (NSE), declined from its opening index of 26,364.27 points to close at 26,173.69 points.
Total market value of all quoted equities on the NSE also dropped from its opening value of N9.076 trillion to close at N9.010 trillion. Wednesday’s decline nudged the negative average year-to-date to -8.62 per cent.
Against all the odds and bookmakers, billionaire real estate mogul Donald Trump of the Republican Party defeated favoured Democrat and erstwhile Secretary of State, Hillary Clinton to emerge the 45th President of the USA in a hotly contested and hugely divisive election.
As the results of the election across the US states trickled in and Trump was on the lead, global markets showed nervous openings with the twin US indicators, S & P 500 and Nasdaq, in the red in opening trades. The global markets however steadied as investors reevaluated the sudden news and steadied against the reality of the change in government.
“In fact, we think every region may have reason for caution under a Trump Presidency, as global uncertainty increases and economic and foreign policy becomes less predictable,” Exotix Partners, a global investment and finance firm, stated in its early reaction to the announcement.
Trump has strong views on illegal immigrants and terrorism and his campaign propositions included deportation and banning of certain groups of people from the USA.
Exotix noted that another area for concern for emerging and frontiermarkets like Nigeria under a Trump presidency is possible greater long-term pressure on immigration to and remittance growth from the US.
“We see a Trump win as lowering risk appetite, increased risk aversion, which will have a negative impact on bond-external debt and local currency, currency and equity valuations in emerging and frontier markets,” Exotix stated.
Afrinvest Securities, a Lagos-based dealer at the NSE, stated that while the sustained decline in share prices should ordinarily trigger bargain-hunting, the current risk mode in global markets, underlined by the unexpected outcome in the US Presidential election, may continue to keep market sentiment low.
Nigerian stock market has significant foreign portfolio with foreign portfolio transactions accounting for some two-quarters of total transactions.
Price trend analysis on Wednesday showed widening selling pressure. The NSE Banking Index declined by 3.0 per cent. The NSE Insurance Index dropped by 1.3 per cent while the NSE Consumer Goods Index depreciated by 0.39 per cent. However, the NSE Industrial Goods Index rose by 0.10 per cent while the NSE Oil & Gas Index inched up by 0.08 per cent.
With 27 losers to 11 gainers, most price changes remained negative. PZ Cussons Nigeria led the losers’ list with a loss of N1.51 to close at N16.49. Flour Mills of Nigeria followed with a loss of 95 kobo to close at N18.05. GlaxoSmithKline Consumer Nigeria and Guaranty Trust Bank dropped by 75 kobo each to close at N15 and N20.65 respectively. Nigerian Breweries lost 50 kobo to close at N143.50. Zenith Bank declined by 41 kobo to close at N14.21. Nasco Allied Industries dropped by 38 kobo to N7.37. Access Bank lost 25 kobo to close at N5.15. Cement Company of Northern Nigeria declined by 22 kobo to close at N4.48 while Union Bank of Nigeria dropped by 19 kobo to close at N4.11 per share.
Total turnover slowed down to 146.11 million shares valued at N1.03 billion in 3,039 deals. The most active stock was Chams Plc with 40.10 million shares valued at N20.05 million. Guaranty Trust Bank followed with 18.34 million shares worth N378.71 million while United Bank for Africa placed third with 14.08 million shares worth N59.59 million.
On the positive side, Guinness Nigeria led the 11-stock gainers’ list with a gain of N1.50 to close at N90. CAP rose by N1.38 to close at N35.40. Dangote Sugar Refinery added 18 kobo to close at N6.30.University Press and Red Star Express chalked up 10 kobo each to close at N3.90 and N4.30 respectively while Unilever Nigeria and Africa Prudential Registrars lost 5.0 kobo each to close at N48.10 and N2.55 respectively.
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