Investors lose N1.8 trillion in one week

Investors’ unfavourable response to the interest rate hike has continued to trigger a selloff on the Nigerian Exchange Limited (NGX) as market capitalisation depreciated by N1.8 trillion in one week.

The capitalisation of listed equities, which stood at N55,810 trillion at the reopening of transactions last week Monday depreciated by N1,775 to close at N54,035 trillion last Friday, March 1, 2024.

Similarly, the all-share index, which measures the performance of listed equities dipped by 3243.55 points or 3.3 per cent from 101, 995.53 to 98,751.98.

Despite attempts by investors to capitalise on the market’s downturn later in the week, the gains were insufficient to offset the losses.

Accordingly, sell pressures on MTNN (-18.9 per cent) and BUA Cement (-10 per cent) triggered a 3.3 per cent Week on Week decline in the index.

Consequently, year-to-date returns settled at 38 per cent.
Sectoral performance was also negative, following losses in the industrial goods (-3.9 per cent), insurance (-3.4 per cent), consumer goods (-2.6 per cent), oil and gas (-1.6 per cent), and banking (-0.7 per cent) indices.

Meanwhile, a turnover of 1.8 billion shares worth N34.1 billion was recorded in 48,464 deals by investors on the floor of the Exchange, in contrast to a total of 1.4 billion units valued at N31.6 billion that was exchanged in 42,040 deals on February 23, 2024.

The financial services industry (measured by volume) led the activity chart with 1.3 billion shares valued at N20.4 billion traded in 24,801 deals; thus contributing 67.7 per cent to the total equity turnover volume.

The conglomerate industry followed with 227.2 million shares worth N2.9 billion in 3,351 deals. The oil and gas industry ranked third with a turnover of 115.3 million units worth N746.9 million in 2,704 deals.

Trading in the top three equities namely Transnational Corporation Plc, United Bank for Africa Plc and Access Holdings Plc and (measured by volume) accounted for 563.1 million shares worth N10 billion in 9,270 deals, contributing 29.93 per cent to the total equity turnover volume.

Analysts at Cordros Capital said: “We expect domestic investors to continue to dominate the domestic equities market over the short-to-medium term, even as higher fixed-income yields may constrain buying activities.

“Elsewhere, we believe foreign investors will continue to adopt a cautious stance in the near term, closely monitoring the activities of the apex authorities in improving FX liquidity and ensuring sustainability.”