Investors trading on the floor of the Nigerian Stock Exchange (NSE) have lost over N366 billion in three trading sessions despite Airtel Africa’s listing on the bourse on Tuesday.
There had been renewed hope from traders who had expressed delight as Airtel Africa got admitted on the main board of the Exchange and as a result lifted the market capitalisation of the nation’s bourse by N1.4 billion.
The Nigerian equities market began Monday on a bullish note as the All Share Index (ASI) appreciated by 0.06 per cent to 29,287.87 points, following interest in MTNN while market capitalisation increased by N7.46 billion to N12.909 trillion.
Tuesday’s session saw the market extending its gains from the previous trading session as the benchmark index appreciated by 0.10 per cent to 29,318.02 points, following the listing of Airtel Africa on the NSE.
Thus, the month-to-date and year-to-date losses moderated to 2.17 and 6.72 per cent respectively while market capitalisation increased by N1.4 billion to N14.288 trillion.
However, the two-day bullish run in the domestic equities market halted as the All Share Index (ASI) fell by 21 basis points to settle at 29,256.60 points while investors on Wednesday lost N124 billion as weak sentiments hit the shares of Dangote Cement, Forte oil and Wapco on Wednesday.
Sell pressures in the shares of Airtel Africa, MTNN and Nestle dragged the benchmark index 1.86 per cent lower on Thursday to settle at 28,712.90 points while the YTD return worsened to -8.6 per cent. Accordingly, investors lost N171 billion in value as market capitalisation fell to N13.993 trillion.
Friday’s session on the NSE ended in red as the ASI slipped further down by 0.51 per cent to close at 28,566.79 points while market capitalisation decreased by N71 billion to close the week at N13.922 trillion, resulting in a loss of N366 billion in three trading consecutive sessions.
At the sound of the closing gong on Friday, 16 stocks depreciated in value while nine others appreciated. Ikeja Hotel led the laggards with 8.67 per cent to close at N1.37 per share, UAC-Prop followed with 8.57 per cent to close at N1.28, Vitafoam dropped 5.35 per cent to close at N3.54, Nigerian Breweries fell by 4.95 per cent to close at N58 while Japaul oil declined by 4.35 per cent to close at 0.22 kobo.
On the flipside, Chip Plc topped the gainers’ chart with 10 per cent to close at 0.33 kobo per share. CCNN was next with a gain of 4.69 per cent to close at N14.50, Sovereign Insurance increased by 4.55 per cent to close at 0.23 kobo, Courtville rose by 4.35 per cent to close at 0.24 kobo while UACN garnered 3.45 per cent to close at N6.
Zenith Bank topped the activity chart with the sale of 17.36 million shares valued at N329.88 million. Stanbic sold 10.78 million shares worth N431.57 million while FBN Holdings traded 8.45 million valued at N50.60 million.
Reacting, analysts at Afrinvest said: “While we expect the downward trend to continue in the near term, it presents opportunities to position in premium stocks. We believe that the bearish run would continue as investors maintain a risk-off approach towards investing in the domestic equities market”.
Chief Economist, Africa, Standard Chartered Bank, Razia Khan, said: “The question that should be asked is what are the things that needs to be done to create resilience in the Nigerian economy? What is policy doing to be able to boost diversification prospects? We know that under the current administration, there has been a strong emphasis on capital expenditure and there would be continued emphasis on capital expenditure to put in the place the enabling infrastructure and that is important for it is good we see the acceleration in Nigeria’s investment rate in order to create the conditions that might facilitate economic diversification in the future.
At the same time, it is equally important to look at policy holistically to see what kind of policies (long term) is needed to undertake that would boost economic diversification because this is not something that can be completed in eight years. Nonetheless, questions need to be asked for every specific policy proposal to see if it helps Nigeria’s economic diversification in the long term or hinders it”.
Khan further noted that the investors’ focus is much likely to be on the reform credentials of anyone who is given a key economic portfolio while adding that until Nigeria is able to put together more resources, it is going to be strained in terms of development and this would be the key thing investors would be looking for, especially as Buhari begins another four years of leadership.
“This is because plans have been outlined and there needs to be an emphasis on capital expenditure, infrastructure funding and there is hope of a smooth passage of the budget and that Nigeria will not have to wait for a long time before budget will be passed and the capital expenditure for the year can get under way, this is going to be necessary to boost growth and investors will be looking very carefully at the kind of structural reforms that are proposed by whoever holds key economic portfolio,” he said.