January 31, 2019

Political hiccups deflate stock market

Stockmarket, week


…as investors lose N105 bn in 3 days

By Peter Egwuatu

Just within the first three trading days of this week, the Nigerian stock market fully reversed the fortunes it garnered in the     first month of the trading year 2019, recording a whopping N105 billion losses to investors.

Specifically, NSE market capitalisation which represents investors worth on the Exchange closed at N11.614 billion from N11.719 billion it closed last Friday, pulling the Year to Date, YtD, performance back from green territory to red, at -0.9 percent.

The market had moved from the red position in the first week of this year to green after over two weeks steady gains up till last Friday.

Nigerian Stock Exchange

Capital market operators have attributed the reversal of the market to the worsened political tension involving the presidency and the judiciary arm of the government over the suspension of the Chief Justice of Nigeria, CJN, Justice Walter Onnoghen.

Meanwhile, activity level at the market yesterday was, however, mixed as volume traded declined 30.2 percent to 247.6million units while value traded advanced by 63.4 percent to close at N3.1bilionn.

Zenith Bank (56.4million units), Access Bank (36.2million units) and Sterling Bank (32.3million units) led the top trades by volume while Zenith Bank (N1.3billion), Nigerian Breweries (N844.0million) and Access Bank (N218.1million) were the top traded stocks by value.

Performance across sectors was bullish as four of 5fiveindices closed in the green. The Banking index appreciated the most gaining 2.4percent due to bargain hunting in Guaranty Trust Bank, (+0.6 percent) and Zenith   Bank(+0.2 percent), trailed by the Oil & Gas index, up 1.4 percent on account of buy interests in Seplat Petroleum (+2.9 percent) and Oando Plc (+1.0 percent). Additionally, Insurance and Industrial Goods indices inched higher, up 0.9 percent and 0.2 percent respectively following gains in Custodian & Allied (+1.5 percent ), Linkage Assurance   (+8.9 percent) and Beta Glass (+7.8 percent ).

On the negative side, the Consumer Goods index shed 0.8 percent on the back of selloffs in Guinness (-8.5 percent) and Flour Mills (-2.1 percent).

Investor sentiment as measured by market breadth showed that 23 stocks advanced against 19 that declined. Cornerstone (+10.0 percent ), Mutual Benefit (+10.0 percent) and ABC Transport   (+9.7 percent) were the top performing stocks   while Air Service (-9.8 percent ), LASACO Assurance (-9.4 percent ) and MC Nichols (-9.1 percent ) led laggards.

Analysts at Afrinvest Research said: “We maintain a bearish outlook on the market in the near term as investors book profits following the prior week’s rally in the equities market.”