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Investors lose N1.8 trillion in two months of COVID-19 in Nigeria

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• As market index rises 0.07 per cent

Stock market investors have lost over N1.8trillion in two months after the first case of Coronavirus (COVID-19), was confirmed in Nigeria on February 27.
 
Specifically, the market capitalisation of listed equities, which stood at N13.657trillion as at Friday, February 28, depreciated by N1.8trillion to N11.786trillion yesterday, while the All-share index, which measures the performance of quoted companies closed at 22,616.28 down from 26,216.46 representing 3,600.18 points drop or 15.9 per cent drop.

This comes as the market resumed activities for the week on a positive note, as price appreciation in MTN Nigeria and seven other stocks buoyed Nigerian equities market performance, causing the All-Share Index (ASI) to advance by 0.07 per cent.
   
Yesterday, ASI increased by 16.90 absolute points, representing a growth of 0.07 per cent to close at 22,616.28 points. Similarly, the market capitalisation increased by N9 billion to close at N11.787 trillion.

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Since the virus was imported into the country, the number of active COVID-19 cases in Nigeria has continued to surge, with more people testing positive, bringing the total number of confirmed cases above the 1,273 mark at the time of filing this report on Monday.
 
The global pandemic’s impact on the economy is far more significant, and with oil demand dropping to record lows in the wake of the outbreak, Nigerian economy is being caught in the cross hairs.
   
Basically, with oil as Nigeria’s biggest revenue earner, the government relies heavily on the resource for dollar earnings to fund its national budget.

With the lockdown leading to the shutdown of industries and businesses, many companies will be unable to pay salaries, a situation that will affect purchasing power among Nigerians, leading to supply and demand shocks
     
More so, the Central Bank of Nigeria (CBN) recent devaluation of the Naira to N380/$, coupled with other perennial issues hitherto bedevilling the local bourse have eroded investors’ confidence in the market.

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The Chief Executive Officer, Investdata Consulting, Ambrose Omordion, said: “Investors during the week under review kept their eyes on economic and earnings news, especially the March consumer price index from the National Bureau of Statistics (NBS), showing that inflation rose to 12.26 per cent from 12.20 per cent in the previous month- the highest in 23 months.
   
“This, therefore, calls for policy measures to address this consistent rise in the consumer price index for the eighth consecutive month, especially now that the lockdown arising from the Coronavirus outbreak globally has triggered prices of goods and services.
   
“It should be noted also that attention in the market today is moving to the financial sector despite the high risk of oil price, the moratorium on interest rates, the advice is for banks to renegotiate the terms of existing loans.”
    
Meanwhile, the upturn in trading activities on Monday was impacted by gains recorded in large and medium value stocks, amongst which were; MTN Nigeria, Guaranty Trust Bank, Union Bank of Nigeria (UBN), Zenith Bank, and Oando Plc.
   
Analysts at Afrinvest Limited expect market performance to be driven by corporate earnings releases for the rest of the week. United Capital Plc believes “the influx of first quarter (Q1), 2020 earnings will continue to shape the interest of investors in the equity market. However, global economic fundamentals and oil market conditions might dissuade interest.”
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However, market breadth closed negative, eight stocks posted gains while 14 declined. Lasaco Assurance recorded the highest price gain of 8.33 per cent to close at 26 kobo per share.        
   
Chams followed with a gain 4.76 per cent to close at 22 kobo, while Oando edged 3.91 per cent to close at N2.39, per share. Guaranty Trust Bank rose 3.63 per cent to close at N20.00, while UBN gained 3.05 per cent to close at N6.75, per share.     
   
On the other hand, Nigerian Breweries led the losers’ chart by 10 per cent to close at N31.05 per share. Skyway Aviation Handling Company followed with 6.58 per cent to close at N1.42, while Transnational Corporation of Nigeria (Transcorp) fell 5.41 to close at 70 kobo, per share.
   
Royal Exchange lost 4.76 per cent to close at 20 kobo, while Aiico Insurance shed 3.61 per cent to close at 80 kobo, per share.
The total volume of trades also decreased by 48.91 per cent to 108.121 million units, valued at N1.333 billion exchanged in 3,354 deals.  
   
Transactions in the shares of Lasaco Assurance topped the activity chart with 13.54 million shares valued at N3.52million. Guaranty Trust Bank followed with 11.754 million shares worth N228.992million, while United Bank for Africa (UBA) traded 11.015 million shares at N64.993 million. FBN Holdings (FBNH) traded 7.426 million shares valued at N32.196 million, while Access Bank transacted 6.532 million shares worth N40.877 million.

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