Last week’s trading on the floor of the Nigerian Stock Exchange (NSE) turned out to be brutal as investors lost over N316 billion week-on-week (w-o-w) due to sustained sell pressure across major counters of the market.
The new trading week had kicked off on a bearish note with the All Share Index (ASI) dropping 0.79 per cent to 29,712.90 points while the month-to-date and year-to-date losses worsened to 5.43 and 9.83 per cent respectively, with market capitalisation declining to N13.812 trillion.
The bourse closed in the negative territory as the ASI fell 0.5 per cent on Tuesday to settle at 28,200.88 points while YTD loss worsened to -10.3 per cent due to sell-offs in MTNN, CCNN and Union Bank. This resulted in lower market capitalisation at N13.7 trillion as investors lost N68.3 billion.
The downward trend in the equities market continued on Wednesday following price depreciation in the shares of GT Bank, Dangote Cement and Union Bank (-1.0%). Consequently, the benchmark index dipped 0.56 per cent to 28,043.32 points while YTD loss worsened to -10.8 per cent. Similarly investors lost N77 billion, pulling down market capitalisation to N13.67 trillion.
Thursday’s session saw the domestic bourse sustaining its run of losses as the index closed 0.6 per cent lower, settling at 27,864.49 points. The fall in the broad index was due to sell-pressures in Seplat, MTNN and ETI. Equally, YTD loss worsened to -11.3 per cent while market capitalisation contracted by N87 billion to N13.58 trillion.
However, the market saw a slight rebound on Friday as the broad index notched up 0.20 per cent with market capitalisation closing at N13.606 trillion and 27,919.50 points respectively.
Traders say the outlook for equities in the short to medium term remains conservative, amidst the absence of any catalyst to drive positive market returns.
They, however, attributed the week’s loss to the performance of the economy while cautioning embattled equity investors against panic sale of shares to avert avoidable losses as the stock market would soon embark on bullish trend.
Speaking to Sunday Sun, Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Patrick Ezeagu described the situation as unnecessary panic sale.
According to him, many investors adopt herd instinct whereby they sell off just because others are selling.
Ezeagu noted that two investors may not necessarily have the same motive for sale or buy order, saying this is where the need for professional investment advice from stockbrokers become compelling.
He stated that a trend analysis of corporate earnings in recent time indicates that many companies across sectors have posted higher earnings with good returns, but this has not significantly reflected in the upward movement of their share prices while explaining that there was nothing unusual about this as the market generally reflects the trend in the economy, hence, investors buy into the future of these companies on the expectation of higher shareholder value.
For his part, the Managing Director, Apt Securities, Kurfi Garba, said: “If the president had made strong words about the economic policy of the economy, it will give the people hope. The macro-economy is weak, and except we see a positive trigger, the bearish run is set to continue. The only hope is for the president to have a strong cabinet, this will send a statement to investors”.
At the close of trading on Friday, market breadth remained negative as 21 stocks declined while 14 others advanced. Micnichols topped the losers’ chart with 10 per cent to close at 0.45 kobo per share, Fidson followed with 9.89 per cent to close at N4.10, Cutix dropped 9.70 per cent to close at N1.49, Courtville fell by 9.09 per cent to close at 0.20 kobo while Union diagnostics lost 8.33 per cent to close at 0.22 kobo.
On the flipside, AbbeyDS topped the gainers’ chart with 10 per cent to close at 0.99 kobo per share. Forte Oil gained 9.81 per cent to close at N20.15, Honeywell followed with 9.78 per cent to close at N1.01, Unity Bank increased by 8.47 per cent to close at 0.64 kobo while Access Bank appreciated by 6.67 per cent to close at N6.40.