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Stocks suffer setback to rising covid-19, forex illiquidity

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CBN rolls out new forex regulation

•As investors lose N257 bn in 5 days

By Peter Egwuatu

Nigerian Stock market suffered another week of losses on rising coronavirus, COVID-19 cases in the country and the persisting Foreign Exchange, Forex illiquidity in the market.

Consequently, investors lost over N257 billion for the five trading days last week as total value of investment on the Nigerian Stock Exchange, NSE represented by market capitalisation dropped to N12.695 trillion last Friday from N12.952 trillion it closed penultimate week/

In the same vein, another major stock market gauge , NSE All Share Index, ASI declined by 2.0 percent Week on Week (W-o-W ) led by selloffs in BUA Cement (-2.3%), MTN Nigeria (-1.3%), Unilever Nigeria  (-18.8%) and the banking stocks.

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Specifically,  ASI declined by 2.0 percent to close on Friday at 24336.12 points from 24,829 points penultimate week.

Accordingly, the Month-to-Date and Year-to-Date, YtD losses recorded -0.6% and -9.3%, respectively.

Meanwhile, analysts at Cordros Securities Limited have stated that: “In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions. Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks.”

Similarly, analysts at Afrinvest Securities Limited noted that investors’ sentiment remains negative propelled by rising COVID-19 pandemic as well as weak economic conditions.

According to them, “We anticipate a sustained bearish momentum in the coming week as investor sentiment remains weak.”

Meanwhile, the sartorial performance last week on the Exchange were were negative, with the Banking (-7.5%), Industrial Goods (-6.4%), Insurance (-2.2%), Oil & Gas (-1.2%) and Consumer Goods (-0.5%) indices on recording weekly losses.

A total turnover of 961.833 million shares worth N9.181 billion in 20,058 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 739.375 million shares valued at N8.563 billion that exchanged hands penultimate week  in 17,248 deals.

The Financial Services industry (measured by volume) led the activity chart with 618.714 million shares valued at N4.338 billion traded in 9,669 deals; thus contributing 64.33% and 47.25% to the total equity turnover volume and value respectively. The Consumer Goods industry followed with 91.119 million shares worth N2.227 billion in 3,703 deals. The third place was the Conglomerates industry, with a turnover of 60.640 million shares worth N62.779 million in 556 deals.

Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc. (measured by volume) accounted for 275.099 million shares worth N2.818 billion in 3,497 deals, contributing 28.60% and 30.69% to the total equity turnover volume and value respectively.

Thirteen (13) equities appreciated in price during the week under review, lower than Eighteen (18) equities in the penultimate week. Fifty-nine (59) equities depreciated in price, higher than Forty-three (43) equities in the penultimate week, while ninety-one (91) equities remained unchanged, lower than one- hundred and two (102) equities recorded in the penultimate week.

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