Follow Us on Google
Nigeria’s stock market plunged for the second time running this week as investors continued to dump shares following panic over the effects of the Coronavirus, declining global crude oil prices, as well as severe pressure on its foreign exchange market.
Although transactions on the domestic bourse closed in the green on Friday, the market capitalisation of the Nigerian Stock Exchange (NSE) fell by over N1.52 trillion in five consecutive sessions as sell-offs were recorded in large capitalized stocks.
Investors lost a total of N329.4 billion as heavy profit taking dominated trading activities on Monday. Furthermore, the All-Share index (ASI) fell by 2.41 per cent to close at 25,647.54 points due to sell pressures in the shares of GT Bank, Zenith and Stanbic IBTC.
Consequently, the market capitalisation fell by N329.4 billion to close at N13.365 trillion while the YtD loss worsened to -4.5 per cent amid fears of a persistent decline in global oil prices.
Tuesday’s session saw the equities market suffering another round of decline after trading activities closed in the red with 33 stocks depreciating in value at the close of trading. The ASI went down by 4.91 per cent – largest decline in a decade- to close at 24,388.66 points while investors lost N656 billion as market capitalisation declined to N12.709 trillion leaving the Year-to-Date (YtD) loss nose-diving to -9.1 per cent.
The downturn continued on Wednesday as the index recorded a significant decline of 3.35 per cent to close trading at 23,572.75 points.
Similarly, market investors lost a total of N425.2 billion as the market capitalisation closed at N12.284 trillion from an initial value of N12.709 trillion while the Year-to-Date (YtD) loss worsened to -12.2 per cent.
Investors on Thursday lost about N1.86 trillion as market capitalisation decreased to N11.827 trillion from an initial opening value of N13.365 trillion on Monday.
Similarly, the All Share Index (ASI) went Southward, 3.72 per cent to 22,695.88 points while the YtD loss worsened to -15.4 per cent.
Friday’s session, however, saw a rebound as the Brent Crude which is Nigeria’s oil grade equivalent in the international spot market increased by 1.84 per cent while it traded at $33.83 per barrel, spurred investors’ interest in banking and oil and gas stocks.
The ASI increased by 0.17 per cent to close the week at 22,733.35 points while the market capitalisation closed at N11.846 trillion.
Analysts who spoke to Sunday Sun said that investors are jittery following fears over naira depreciation, as well as the Coronavirus which triggered shares being dumped in global markets.
The Chairman of Association of Securities Dealing Houses of Nigeria (ASHON), Chief Oyinyechukwu Ezeagu, said that the trend was not limited to Nigeria.
“The effect of the Coronavirus is gradually affecting trading all over the world and whatever happens elsewhere reflects in our market. The centre of it all is China and being a major world power both in productive and consumption capacities, any ill wind affecting China would naturally cause a big sneezing to the rest of world,” he said.
On his part, Managing Director, APT Securities and Funds Ltd, Garba Kurfi, attributed the development to panic selling by foreign investors due to fear of naira devaluation.
Kurfi, however, expressed optimism that the current recovery in the price of crude oil, which rose by nine per cent would likely reflect in the prices of stocks in the days to come.
In an emailed note sent to Sunday Sun, analysts at Afrinvest said: “As oil prices struggle to trend upward amid no respite for the COVID-19 outbreak, we expect sentiment to remain bearish”.
Meanwhile, UBA, at the close of transactions on Friday, led 16 other equities on the gainers’ chart with 9.82 per cent to close at N6.15 per share. Fidelity Bank was next with 9.80 per cent to close at N1.68, Zenith Bank rose by 9.68 per cent to close at N11.90, Mansard increased by 9.27 per cent to close at N1.65 while AIICO garnered 8.96 per cent to close at 0.73 kobo.
On the flipside, Africa Prudential led 15 others on the losers’ chart with 10 per cent to close at N3.24 per share. Cadbury followed with a decline of 10 per cent to close at N4.95, NEM dropped 10 per cent to close at N1.44 while Seplat lost 10 per cent to close at N544.50.
Furthermore, the volume and value of stocks traded stood at 733.19 million units and N10.2 billion respectively, exchanged in 6,703 deals.
