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Market volatility persists as investors’ wealth falls more by 1.8%

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Nigerian Stock Exchange

Stock price volatility with mixed trading sessions on the Nigerian Stock Exchange (NSE) hallmarked transactions last week, amid low liquidity, as investors continue to correlate government’s unclear policy direction with market fundamentals.

Last week, NSE’s All-Share Index and market capitalisation depreciated by 1.8 per cent to close the week at 29,212 points and N10.979 trillion respectively.
  

Similarly, all other indices finished lower with the exception of the NSE Pension, NSE Insurance and NSE oil/gas that rose by 0.49 per cent, 1.30 per cent and 0.02 per cent respectivelyFor analysts, the trend is likely to continue ahead of this month’s inauguration of the President Muhammadu Buhari, expected to herald the new cabinet and policies that would correct certain anomalies and enhance the restoration of the much-needed confidence in the government.

Specifically, analysts at Investdata believe that it is the number of ordinary Nigerians impacted by policies at this time that matter, rather than excuses for failure, intentions or needless regrets.
 
“The impact of Nigeria’s yearly budgets in recent times have not had the much expected trickle-down effect necessary to trigger economic growth and development on a large scale as expected, given that government is the biggest spender.

“This has been blamed on the government’s disbursement and implementation style which hinders the flow of these resources. Construction and development of infrastructure drive the economy and create employment to oil the wheel of a progressive economy.

“But unfortunately, the reverse is the case of Nigeria as the economy struggles despite the seeming improvement in economic indices. Nigerians, therefore, expect a new strategy from the economic managers from the implementation of the 2019 budget approved by the National Assembly last month, which is now awaiting assent by President Buhari,” they said.

In a note from Afrinvest Securities Limited, the market, currently, is lacking drivers for a sustained bullish run, so the market would continue to trade sideways, with profit-taking and bargain-hunting activities dominating an equal amount of trading session over the short term.

Meanwhile the stock market had four-day trading sessions last week, as the Federal Government declared Wednesday, May 1, 2019, a public holiday to mark Workers Day.

A total turnover of 1.470 billion shares worth N15.498 billion was recorded in 18,092 deals, in contrast to 1.432 billion shares valued at N15.089 billion that were exchanged in 15,342 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 610.138 million shares valued at N5.828 billion traded in 8,012 deals, thus contributing 41.50 per cent to the total equity turnover.

The conglomerates industry followed with 227.766 million shares worth N777.211 million in 1,558 deals. The third place was consumer goods industry with a turnover of 154.760 million shares worth N4.496 billion in 3,622 deals.
 Trading in the top three equities, namely, Transnational Corporation of Nigeria Plc, Cement Company of Northern Nigeria Plc and Japaul Oil and Maritime Services Plc (measured by volume) accounted for 403.650 million shares worth N2.103 billion in 1,124 deals, contributing 27.46 per cent to the total equity turnover.
 

A total of 1.190 million units of Exchange Traded Products (ETPs) valued at N10.967 was executed in 12 deals, compared with a total of 4,800 units valued at N45,578.70 transacted last week in nine deals
.

Also, 32 equities appreciated in price during the week, higher than 30 in the previous week and 44 equities depreciated in price, higher than 40 equities of the previous week, while 92 equities remained unchanged, lower than nine equities recorded in the preceding week.


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