Apathy, uncertainty sustain hold on market, trigger sell-off
As investors continued their cautious approach amidst the prevailing uncertainties, selloff pervaded the equity sector of the Nigerian Stock Exchange (NSE).Analysts, however, have argued that in the absence of any news capable of inspiring hopes on the administration’s plans to reinvigorate the economy, the bearsh trend would remain on unabated.
Presently, there is rising confidence crisis and low market liquidity, arising from the fact that “smart” investors have earlier exited the sector and now seeking solace in the money and fixed income markets that continue to experience boom.
Reviewing equity transactions last week, the Monday trading session closed on a downward note, following price losses suffered by most blue chip stocks, as market capitalisation depreciated by N6billion.The decline was due to losses in medium and large capitalised stocks, among which are, Mobil Nigeria, Cement Company of Northern Nigeria (CCNN), Guaranty Trust Bank, UACN Property Development Co and Ikeja Hotel.
For Tuesday trading, the NSE sustained sliding profile, as more blue chip stocks depreciated in price, resulting to a further slide in the All-Share Index by 0.4 per cent.NSE extended the negative streak on Wednesday, as indices plunge further by N46 billion, influenced by price depreciation in medium and large capitalised stocks, among which were Dangote Cement, Mobil Nigeria, Guaranty Trust Bank, Nigerian Breweries and Access Bank.
However, Market breadth closed at par, recording 21 gainers and 21 losers.Further analysis of last week’s transactions showed that ASI and market capitalisation depreciated by 1.3 per cent to close the week at 28,847.81 points and N10.842 trillion respectively.
Similarly, all other indices finished lower with the exception of the ASeM Index which closed flat.The Chief Research Officer of Investdata Consulting, Ambrose Omodion said: “We expect this mixed performance to continue as market players digest the Q1 numbers in expectation of April inflation and Q1 GDP data, alongside the new cabinet list, now that the 2019 budget has been passed.
Also, analysts at United Capital Limited said: “The major reason for the relatively lackluster performance by the NSE can be attributed to lack of foreign interests, most likely as a result of uncertainties around the current administration as regards the team it will employ to implement its policies.
Cordros Capital Limited said: “ln our view, the sell-offs in the Nigerian equities market is overdone compared to peer markets… Beyond the obvious, we believe that the blend of positive macroeconomic fundamentals and compelling valuations support our view of a near term recovery.”:
A turnover of 1.477 billion shares worth N10.876 billion was recorded in 20,740 deals, lower than 1.470 billion shares valued at N15.498 billion that was exchanged in 18,092 deals during the preceding week.The financial sector led the activity chart with 919.604 million shares valued at N7.544 billion traded in 11,975 deals; thus contributing 62.28 per central to the total equity turnover volume and value respectively.
The ICT industry followed with 204.019 million shares worth N58.786 million in 570 deals. The third place was oil and gas Industry with a turnover of 154.554 million shares worth N251.781 million in 1,735 deals.Trading in the top three equities namely, Access Bank Nigeria Plc, Courtville Business Solutions Plc and United Bank for Africa Plc (measured by volume) accounted for 503.716 million shares worth N2.338 billion in 2,754 deals, contributing 34.11 per cent to the total equity turnover volume and value respectively.
Also, 97,154 units of Exchange Traded Products (ETPs) valued at N1.318 million were executed in two deals compared with 1.19 million units valued at N10.967 million transacted in preceding week in 12 deals.A total of 265 units of Federal Government Bonds valued at N281,654.91 were traded this week in five deals compared with a total of 14,589 units valued at N15.164 million transacted last week in 12 deals.
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