A sell-off in the shares of certain highly capitalised businesses last week resulted in N784 billion in losses for investors on the stock market.
Despite indications of recovery in certain banking securities, which had previously led to the market’s poor performance, the selloffs kept the stock market in negative territory.
Following the recent statement on the suspension of the Dangote Foods merger and the ongoing reactions to the banking sector recapitulation, investment analysts had projected a likelihood of profit-taking activities.
The Nigerian Exchange Limited (NGX) All Share Index (ASI) saw a 1.39 percent decline to 98,152.91 points at the end of the week’s transactions. The losses were primarily caused by MTN Nigeria Communication Plc, FBN Holdings Plc, and Nestle Nigeria Plc, whose values decreased by 9.8 percent, 16.3 percent, and 11.6 percent, respectively (investors).
This comes amid a recovery in Guaranty Trust Company (GTCo) Plc, which increased by 6%, Stanbic IBTC (3.6%), and Zenith Bank Plc (1.6%). Similarly, the market capitalization of listed stocks declined to N55.512 trillion from N56.296 trillion, a 1.39 percent drop.
According to sectoral analysis, the banking industry was the largest decliner, falling 3.1 percent, followed by the oil and gas sector, which fell 1.4 percent, and the consumer goods sector, which fell 1.2 percent. On the other side, the industrial goods sector increased by 0.4%, while the insurance sector remained steady.
The trading activity level was higher, with a 15.2 percent increase in total trading volume and a 6.0 percent increase in trade value to 1.839 billion units and N34.25 billion, respectively.
According to Cordros Capital analysts, the current downward trend is likely to continue in the short term until positive catalysts spark a rebound. On the other hand, they stated: “We highlight that the current favourable entry points of beaten tickers may spark bouts of recovery, even as investors weigh earnings releases.”
Meanwhile, a further breakdown of the week’s trading revealed that the financial services sector, measured by volume, led the activity chart with 1.129 billion shares valued at N22.290 billion traded in 22,008 deals, accounting for 61.38 percent and 65.06 percent of total equity turnover volume and value respectively.
Investors
The conglomerate sector followed with 194.179 million shares for N2.822 billion in 1,923 trades, while the construction/real estate sector came in third with 130.702 million shares worth N649.957 million in 556 deals.
Source: vanguardngr.com
