By: KAYODE TOKEDE
The equities market of the Nigerian Stock Exchange (NSE) in two days has depreciated by N273.7 billion as demand wanes ahead of earnings season.
The Market Capitalization shed N273.7 billion, representing a decline of 1.7per cent to close at N15.75 trillion on Tuesday from N16.02 trillion the market opened for trading this week.
Similarly, the NSE All-Share Index (ASI) shed 762.69 basis points, representing a decline of 1.72 per cent to close at 43,877.30 basis points from 44639.99 basis points.
However, the market in Tuesday dropped by per cent largely driven by the sell-off in Zenith Bank, FBNH, United Bank for Africa Plc and Guaranty Trust Bank Plc.
Performances were bearish across major sectors with NSE Banking dropping -2.11 per cent) being the worst performer.
NSE Industrial Index (-0.98 per cent), NSE Oil & Gas index (-0.42 per cent) and NSE Consumer Goods Index (-0.28 per cent) also closed negative.
The downturn was impacted by losses recorded in medium and large capitalized stocks, amongst which are; FBNH (-5.15 per cent), Julius Berger (-4.71 per cent), Flour Mills Plc (-4.71 per cent), Zenith Bank (-4.44 per cent), CCNN (-3.85per cent), Dangote Flour Mills (-3.01per cent), Mobil Oil Nigeria (-2.78 per cent), UBA (-2.43per cent), WAPCO (-2.08per cent), Presco Plc (-1.41 per cent), Access Plc (-0.78 per cent), Guaranty Trust Bank (-0.71 per cent), INTBREW (-0.35 per cent), Forte Oil (-0.22per cent) and NB (-0.10per cent).
Market breadth index, a gauge for investor sentiment, ended negative (-0.28x) as 48 stocks declined compared to 18 stocks that gained. While Prestige Assurance Plc (+7.69%) led the gainers’ chart, Hmarkins (-9.09per cent) was the top loser.
Market activity improved with total volume and total value up by +68per cent and +77per cent respectively as investors exchanged 717million units of shares worth N4.91billion. LASACO was the most actively traded stocks with 182million units of shares worth N59million.
Traders said investors who were initially underweight Nigerian equities spent most of last month building their positions. But now appetite has waned as most await year-end results due in March.
Some foreign investors spooked by Nigeria’s capital controls stayed on the sidelines last year before the central bank floated the naira for them.
The CEO , NSE, Mr. Oscar Onyema has said he expected corporate earnings to lift equities this year, despite currency and political risks, after stocks crossed 44,000 points three weeks ago to hit a nine-year high.
Analysts at Investment One said, “Going forward, we expect the market to trade sideways even as investors continue to take positions in this earnings season. Despite the sell-off we saw in the market recently, we believe this may present entry opportunities into our quality names for investors with a medium to longer term horizon.”