Stocks tumble on election postponement

THE equities market closed yesterday on a negative note, as Nigerian Stock Exchange [NSE] All Share Index [ASI] depreciated by 2.08 per cent to close at 29,360.55 basis points, compared with the 0.71 per cent depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at 5.28 per cent

  Market breadth also closed negative as Seplat led eight gainers against 36 losers topped by May and Baker at the end of yesterday’s session- an unimproved performance when compared with previous outlook.

   Market turnover closed negative as volume moved southwards by 15.67 per cent against 9.49 per cent uptick recorded in the previous session. Access, ETI and Guaranty were the most active to boost market turnover. Nestle and Guaranty topped market value list.

  On sectoral indices, oil and gas  recorded 2.15 per cent gain to emerge the most supportive sectoral index among others while consumer goods emerged as worst hit to close with 3.85 per cent.

  Volume shockers included Dunlop which led the list of active stocks that recorded impressive volume spike at the end of yesterday’s session.

  Analysts believe that the rescheduling of the general elections is tantamount to deferring both socio-political stability, and consequently, reprieve for the financial markets.

   Specifically, Proshare analysts  believe this does not in any way bode well for ailing investors’ confidence and already lean capital inflows.

  Analysts  expect market reaction over elevated political risks to create attractive entry points,  holding a cautious view on equities. 

  Except for a significant reversal in the international prices of crude oil in the near term (which looks most unlikely), Proshare analysts  expect the lull in the equities market to remain, at least, in the pre-election period, given a strong positive correlation between the performance of the Nigerian equities market and investors’ perception of domestic risks. 

  In addition, they reckon that expectations of depressed corporate earnings and low dividend payout (on account of regulatory headwinds in the banking sector) will further subdue prices in the equities market in the near term.