Investors who had hoped for a better trading week on the floor of the Nigerian Stock Exchange (NSE) had their hopes dashed as shares of MTNN was down in three consecutive trading sessions, leaving the benchmark index down 1.4 per cent.
Trading activities resumed the week with bargain hunting in Nestle, CCNN and UBA, pushing the All Share Index (ASI) up 0.14 per cent to 27,565.14 points while YTD loss eased to -12.3 per cent. Consequently, market capitalization increased by N19 billion to N13.410 trillion.
Tuesday’s session saw the equities market recording the second consecutive day of gains, as the benchmark index widened by 0.08 per cent to 27,586.79.56 points, driven by the gain in MTNN. Thus the Month-to-Date return increased to +0.22 per cent while the Year-to-Date losses moderated to -12.23 per cent.
However, Wednesday’s session saw proceedings close in the red as price depreciation was recorded in Nestle, Dangote Cement and MTNN, which then drove the index 0.97 per cent lower to 27319.64 points. As such, YTD loss dipped to -13.1 per cent while market capitalisation shed N130 billion to settle at N13.290 trillion.
Sustained sell-offs in the shares of MTNN weighed on performance of Thursday’s session as the ASI shed 0.17 per cent to 27,273.14 points. Consequently, YTD loss declined to -13.2 per cent while market capitalization decreased by N33 billion to N13.257 trillion.
Friday’s session was not any different as the ASI closed at 0.39 per cent to settle at 27,146.57 points while market capitalisation closed the week at N13.206 trillion, resulting into a total loss of N185 billion and 1.4 per cent week-on-week (w-o-w).
Analyzing the sectors, the Consumer Goods (-1.3 per cent) and Oil & Gas (-0.02 per cent) indices were the sole losers, while the Insurance (+0.8 per cent), Industrial Goods (+0.6 per cent), and Banking (+0.2 per cent) indices recorded gains.
Market breadth remained negative as 18 stocks depreciated in value while 16 others appreciated. Neimeth was top on the losers’ chart with 10 per cent to close at 0.45 kobo per share, Glaxosmithkline dropped 9.49 per cent to close at N7.15, ETI followed with 7.41 per cent to close at N7.15, NEM lost 6.84 per cent to close at N1.77 while Forte Oil decreased by 3.65 per cent to close at N14.50.
On the other hand, UACN topped the gainers’ chart with 10 per cent to close at N6.05 per share. NPF Microfinance Bank was next with 9.73 per cent to close at N1.24, ABC Transport gained 9.38 per cent to close at 0.35 kobo, Cornerstone garnered eight per cent to close at 0.27 kobo while Lasaco increased by 7.41 per cent to close at 0.29 kobo.
Furthermore, investors’ sentiment towards MTNN remained weak as the stock dropped N42 billion in three consecutive days (Wednesday, Thursday and Friday) as its price closed the week at N138.
The telecommunications company, which is Nigeria’s largest, announced in a statement on Wednesday that all its offices and service centers will be closed till further notice to avoid reprisal attacks on its facilities and this was due to the attacks and demonstrations at its offices to protest violence being carried out against Nigerians living in South Africa.
The atmosphere in both countries is far from settled and given MTN’s key role in the country, it will be interesting to see how this affects the telecom industry and the stock market going forward as investors’ confidence in MTN Nigeria’s stocks — trading as MTNN — seemingly remained unsettled as some are pressing the panic button, something market analysts have advised against while calling for caution.
Speaking to Sunday Sun via a telephone chat, Managing Director, Afrinvest Securities Limited, Ayodeji Ebo, said: “It may be some form of reaction, but there is some level of calmness now so we do not expect that to be sustained. We feel that some investors may be very wary of the situation, but for now it is under control. There has not been any form of positive trigger that would excite investors, so sentiments remain weak.”
Cordros Capital in a weekly note sent to Sunday Sun, said: “Over the coming week, we expect the market to remain pressured given global risk-off sentiments and weak domestic participation.
Nonetheless, we note that valuations remain attractive, while price deteriorations have resulted in expected dividend yields on some stocks rising significantly. Hence, we advise long-term investors to consider taking positions in such fundamentally justified equities, while short-term investors should tread the cautious trading path”.