Amid profit taking, low appetite for stocks on the part of investors, banking stocks on the main and premium board of the Nigerian Exchange Group Limited (NGX) declined by 6.8 per cent in the first half (H1) of 2021.
Daily Sun investigations revealed that the stocks recorded a loss of N189 billion or 6.8 per cent to close at N2.588 trillion in market capitalisation on the last trading day of June 30, 2021 as against an opening figure of N2.777 trillion at the beginning of trading on January 4, 2021.
This is coming on the back of the negative sentiments recorded in H1 2021 as the stock market’s cumulative Year-to-Date (YTD) returns on investments in equities during the first half of the year closed at –5.8 per cent. Furthermore, equity investors lost about N1.3 trillion in the period under review as concerns centered around the rising insecurities in the country.
However, in an emailed note to Daily Sun, analysts at Cordros Capital, maintained that the banking sector, key players demonstrated a commendable level of resilience despite the peculiar circumstances of the relatively weak and riskier environment and increasingly tight liquidity positions.
They noted that considering the peculiarity of last year, both global and local banks were largely conservative in risk asset creation following the increased risks from the weakened economic and business environments, stating that there has been an improvement in risk asset creation as reflected in the increased credit to the private sector – up 10.1 per cent year-on-year (y/y) to N31.82 trillion in April 2021.