TheÂ downward trend in the Nigerian capital market reached an alarming height, last week, as investors lost N170.17 billion of their investments in quoted securities on the Nigerian Stock Exchange (NSE).
Investorsâ€™ woes were compounded by the massive decline in the share value of major blue chips, leading to a decline in the key market indices, the All-share index and market capitalisation.
In particular, the index which opened the week at 21,374.41 points shed 715.32 basis points, representing a depreciation of 3.35 per cent to close at 20,659.09 points while the capitalisation dropped by N170.17 billion or 3.35 basis points to close at N4.914 trillion from N5.084 trillion at which it opened.
Analysts blame the decline to the unimpressive results declared by the banks and the forthcoming yuletide seasons.
According to a stockbroker who spoke on the condition of anonymity, investors are skeptical about their investments in the market and would grab any slight opportunity presented by a slight share price gain to dispose of their shares.
He blamed this development on the unimpressive financial statements of the banks, especially the heart-wrenching financials of some of the major banks.
He further noted that the forthcoming yuletide season is also a major factor responsible for the decline in the value of the shares and the market indices.
He said, â€œThe present situation in the market is attributable to a number of factors, among which are the not-too-impressive results of the banks and the yuletide season.
A number of banksâ€™ results have given investors serious cause for concern while the yuletide season has brought about a massive sell-off of shares by investors and fund managers to meet up with the demands of the season and to settle their accounts for the year respectively.â€
Five of the eight sanctioned banks released their results to the investing community last week. Oceanic Bank International Plc, in its unaudited results for the third quarter financial year ended, September 30, 2009, announced a loss after tax and exceptional items of N286.04 billion, Union Bank Nigeria Plc in its unaudited results for the half year ended, September 30, 2009, recorded a loss after tax and exceptional items of N222.86 billion, Afribank
Nigeria Plc declared a loss after tax and exceptional items of N71.26 billion, in its unaudited results for the half year ended, September 30, 2009.
Intercontinental Bank Plc, in its unaudited results for the seven months ended, September 30, 2009, posted a loss after tax and exceptional items of N328.45 billion, while FinBank Plc recorded a loss after tax and exceptional items of N120.69 billion in its unaudited results for the half year ended, September 30, 2009.
UAC Nigeria Plc recorded the most share price loss, in the week under review, dropping by N3.49 to close at N36.01 per share, Julius Berger Nigeria Plc followed with a loss of N2.81 to close at N26.09 per share and United Bank for Africa Plc dipped by N1.95 to close at N10.50 per share.
On the contrary, Nestle Nigeria Plc recorded the most share price gain, rising by N5.02 to close at N239.00 per share, Flour Mills Nigeria Plc followed with a gain of N1.95 to close at N34.50 per share and Dangote Flour Mills Plc garnered N1.46 to close at N8.97 per share.