Stock market loses N1.12tn in May, records longest chain of losses in 3 years

The Nigeria Stock Exchange (NSE) sustained a weak performance throughout May, causing the market to hit its worst monthly decline in over 2 years amid continous sell offs on market bellwethers by investors.

The All Share Index (ASI), which opened the month with 41,268.01points, slid by 7.7% to close at 38,104.54 points.

Market capitalisation of traded equities shed N1.146 trillion in the month under review to close at N13.803 trillion.

Similarly, the bearish performance in the equities market extended for the 11th consecutive trading session into June, as the ASI declined all through. This is the longest consecutive losses since July, 2015.

Trading session on Friday recorded the highest drop in six months with market capitalisation shedding N467 billion.

Analysts at Afrinvest Securities Limited said the poor performance of stocks is largely in line with the trend across emerging market equity indices as foreign investors continue to exit these markets.

“As sentment on emerging market equites remains weak globally, we believe market performance will remain pressured,” they said.

On weekly basis, the NSE ASI fell for the sixth consecutive week this week, falling 6.4% Week-on-Week (W-o-W), while Year-To-Day performance turned negatve, setling at –3.7%. The market capitalisation lost N908.2 billion during the review week.

The depreciation in market indicators was majorly caused by losses in market bellwethers like DANGCEM (-8.6%), NESTLE (-10.6%), NIGERIAN BREWERIES (- 10.7%), GUARANTY (-7.9%) and ZENITH (-4.3%).

Also, the performance of the sectors was largely negative this week as all indices closed in the red W-o-W.

The Industrial (-10.3%) and Consumer (-8.5%) Goods indices declined the most W-o-W, following selloffs in DANGCEM (-10.3%), WAPCO (-16.3%), NESTLE (-10.6%) and NIGERIAN BREWERIES (-10.7%).

The Banking index followed suit, losing 4.5% W-o-W, dragged by price depreciaton in GUARANTY (-7.9%) and ZENITH (- 4.3%).

Similarly, the Oil & Gas Index fell 2.3% W-o-W on the back of losses in FORTE (-13.6%) and OANDO (-7.6%) while the Insurance index marginally slid 0.1% W-o-W.

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However, market activity remained strengthened because of the large selling activities leaving the volume and value of traded equities which grew by 42.1% and 82.9% to 389.3 million units and N5.9 billion respectvely.

“The successive weeks of losses in the market have created bargain opportunites for investors to take advantage of and we believe this will drive market performance in the coming week,” the analysts said.

The best performing stocks for the week were ETERNA (+20.1%), CCNN (+16.5%) and MBENEFIT (+8.6%), while INTBREW (-22.4%), WAPCO (-16.0%) and FORTE (-13.6%) were the worst performers in the week.

 

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