June 10, 2024

Sell pressures depress stock market



…as investors lose N44bn

By Nkiruka Nnorom

Profit taking activities in the shares of some blue chip companies drove the stock market to the negative region last week, even as investment analysts have posited that market sentiment will remain largely bearsh this week.

Specifically, sell pressure in Transnational Corporation of Nigeria, Transcorp Plc, which recorded 11.2 percent price decline and United Bank for Africa, UBA Plc, which also saw a 5.4 percent decline drove a 0.1 percent depreciation in the All Share Index, ASI.

Consequently, the all share index which started the week at 99,300.38 points fell to 99,221.14 points.

This marginal decline translated into a N44 billion loss wiped off from the wealth of equity investors, even as the exchange recorded 33 weekly gainers against 37 weekly decliners on the back of weak market sentiment. 

Analysis of the sectoral performance showed a mixed performance as banking and the oil and gas sectors depreciated by 0.6 percent and 0.2 percent respectively, while the insurance and the consumers goods sectors advanced by 0.8 percent and 0.3 percent respectively. 

Meanwhile, the industrial goods sector closed flat.

Analysing activity levels, trading volume, and value declined by 22.2 percent and 2.6 percent to 1.70 billion units and N30.49 billion respectively. 

In their prognosis, analysts at Cowry Asset Management said: “Looking ahead to the next week, a mixed trend is expected, driven by profit-taking activities, the publication of third-quarter earnings forecasts by corporates, and portfolio rebalancing. 

“Market pullbacks are anticipated to enhance the index’s upward potential, supported by the ongoing dividend earnings season. 

“Investors and traders are expected to also position themselves for expected macroeconomic data, such as the Consumer Price Index for May.”