February 19, 2019

ELECTION HICCUP: Investors lose N195bn in one day

naira notes


…Nigerian Breweries, GTB, lead losses

By Peter Egwuatu

The stock market yesterday recorded its highest loss in a day as the benchmark index, Nigerian Stock Exchange, NSE All Share Index,    ASI, fell by -1.61 percent to close at 32,190.07 points following the uncertainties surrounding the postponement of Nigeria’s general election by the Independent National Electoral Commission, INEC, last weekend.



The election which was earlier scheduled to hold last Saturday 16th February was shifted by one week to Saturday February 23rd, 2019 by INEC, few hours to commencement of voting, a development    capital market operators and analysts had predicted would adversely affect the stock market.

Banking stocks push NSE Index higher by 0.5%

The decline in the market was triggered by losses in bellwether stocks – Nigerian Breweries (-9.6 percent), Guaranty Trust Bank, (-3.8 percent) and Zenith Bank (-3.0 percent).

As a result, market capitalisation, which represents investors’ worth decreased by N195.8 billion to N12.0 trillion while    Year-to-Date, YtD, gain moderated to 2.4 percent. Activity level weakened as volume and value traded declined by 71.2 percent and 48.2 percent to 232.7million units and N3.4billion respectively.

Performance across sectors was also negative as all five indices closed in the red. The Banking and Oil & Gas indices led decliners shedding 3.2 percent    and 2.9 percent respectively following profit taking in GTBank (-3.8 percent), Zenith Bank (-3.0 percent), Total (-7.3 percent ) and MOBIL (-7.6 percent).

The Consumer Goods index trailed, down -1.5 percent on the back of losses in Nigerian Breweries (-9.6 percent) and Dangote Sugar    (-4.9 percent) while the Industrial Goods index fell by 1.2 percent following sell offs in    Cement Company of Northern Nigeria CCNN (-4.8 percent ) and Dangote Cement (-0.4 percent). WAPIC Insurance (-4.7 percent) and NEM    Insurance (-2.0 percent    dragged the Insurance index 1.1 percent lower.

Investor sentiment as measured by market breadth weakened as 12 stocks advanced against 37 decliners.

Reacting to the market development, Chairman, Association of Stockbroking Houses of Nigeria, ASHON, Chief Patrick Ezeagu said: “The market reacted expectedly, negative dropping 1.61 percent in ASI. Uncertainty harms the market and the unexpected election postponement has generated this avoidable negative sentiment. We needed to put our acts together in this clime for once.”

Analysts at Afrinvest Research said: “We anticipate the bearish run to be sustained this week due to pre-election jitters caused by the uncertainties surrounding the elections.”

But investment analyst at FSL Securities & Investment Limited, Mr. Victor Chiazor, indicated that in addition to the election jitters, unimpressive corporate performance announced by blue chip companies contributed to the market downturn.

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Moreover, he disagreed that the bearish development would be sustained.

He stated: “Despite some positive economic indicators, the market is negatively reacting to the election postponement, the unimpressive earning being released by the likes of Nigerian Breweries and also recording a few sell off by investors taking profit, as the market has recorded a decent run in the last ten days.