Despite the presentation of Nigeria’s 2020 budget by President Muhammadu Buhari on Tuesday, investors’ appetite for equities weakened as the market capitalisation fell by approximately N220 billion week-on-week (w-o-w).
This is even as the total turnover of deals done by investors rose by 13.2 per cent from 12,032 deals in the preceding week to 13,616 deals at the end of the trading week.
Price losses in the shares of Nestle, Dangote Cement and Seplat dominated Monday’s session, thus, pulling the All Share Index down by 0.45 per cent to 26,866.41 points while market capitalisation dropped to N13.078 trillion.
Tuesday’s session saw investors taking profit in the shares of MTNN, UBA and Dangote Sugar as the benchmark index declined by 0.2 per cent to close at 26,809.92 points while investors lost N28 billion to close at N13.051 trillion.
The nation’s bourse on Wednesday ended in the negative zone as the ASI fell by 0.79 per cent to close at 26,598.94 points following losses recorded in the shares of Dangote Cement, Nigerian Breweries and Nestle while investors lost N103 billion to close at N12.948 trillion.
Thursday’s session saw further profit taking in the shares of ETI, UBA and Custodian which pulled the ASI down by 0.06 per cent to 26,583.75 points while investors lost N7.4 billion as market capitalisation closed at N12.758 trillion.
Friday’s trading session was not any different as the index dropped 0.19 per cent to close the week at 26,533.78 points, thus dipping by 1.68 per cent w-o-w while market capitalisation closed at N12,916 trillion as investors lost N221 in five consecutive trading sessions.
Accordingly, Year-to-Date (YtD) loss worsened to -15.6 per cent.
Analysing by sectors, losses were evident with the exception of the Banking (+0.14 per cent) index, as the Consumer Goods (-3.96 per cent), Oil and Gas (-3.17 per cent), Industrial Goods (-1.76 per cent) and Insurance (-1.60 per cent) indices all declined.
The most active stocks as at October 10, 2019, were Dangote Cement which sold 114.68 million shares worth N16.629 million, Access Bank transacted 80.7 million shares valued at N592.7 million while FCMB traded about 51.64 million shares worth N82.62 million. At the sound of the closing gong, 15 equities declined while eight others advanced. Wapic topped the losers’ chart with 8.57 per cent to close at 0.32 kobo per share, Linkage Assurance was next with 7.84 per cent to close at 0.47 kobo, Custodian dropped 5.83 per cent to close at N5.65, Honeywell Flour decreased to five per cent to close at 0.95 kobo while Royal Exchange lost 4.76 per cent to close at 0.20 kobo.
On the other hand, LearnAfrica topped the gainers’ chart with 9.82 per cent to close at N1.23 per share. Livestock feeds followed with 9.30 per cent to close at 0.47 kobo, UCAP increased by 7.50 per cent to close at N2.15, ABC Transport gained 5.26 per cent to close at 0.40 kobo while Wema Bank garnered 3.45 per cent to close at 0.60 kobo.
After due consultation with all relevant stakeholders, the 2020 budget was prepared and presented to the National Assembly on Tuesday – the earliest in 10 years.
While presenting a record N10.33 trillion (about $33.8 billion)budget for 2020, President Buhari, noted that the sum of N8.16 trillion is estimated as the total Federal Government revenue in 2020 and comprises oil revenue N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion.
Analysts who spoke to Sunday Sun were of the view that the presentation of the budget did not give investors the confidence that things would change, as such they remained pessimistic which affected the trading sessions.
A stock broker who craved for anonymity, noted that investors’ apathy has increased over time because investors no longer have confidence in the macroeconomic situation of the Nigerian economy.
He said: “Growth has been sluggish and it has not been rapid as we would have expected it to be so a lot of these investors are on the fence and some are now into fixed income rather than equities”.
Cordros Capital in their weekly note, said: “In our view, the trend witnessed through 2019 so far is likely to persist through the fourth quarter, although we expect pockets of gains over the last few weeks of the year as fund managers and portfolio managers realign portfolio prior to the start of 2020”.