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The volume of transactions on the floor of the Nigerian Stock Exchange (NSE) fell by 66.7 per cent following sell pressure in the shares of market heavyweights – Dangote Cement, UBA and Transcorp – after five consecutive sessions.
Similarly, the NSE All-Share Index (ASI) depreciated by 2.35 per cent to close the week at 22,198.43 points while the market capitalisation fell by N278 billion to close the week at N11.568 trillion.
The market began the week on a bearish note as the index declined by 0.1 per cent to 22,705.19 points driven by investors’ sell-off in UBA, FBN Holdings, and Wapco stocks. Thus, the Month-to-Date and Year-to-Date losses worsened to -13.4 and -15.4 per cent, respectively.
Tuesday’s session saw the bears strengthening its hold as sell pressures in Dangote Cement, International Breweries and Nascon drove the ASI down by 0.71 per cent to 22,543.07 points.
Consequently, YtD return worsened to -16.0 per cent while market capitalisation fell N84.5 billion to N11.8 trillion.
But, gains recorded in the shares of MTNN, GT Bank and Oando drove the stock market’s index up by 1.09 per cent to 22,789.64 points. This was even as the Year-to-Date (YtD) return moderated to -15.1 per cent while market capitalisation rose N129 billion to N11.876 trillion.
However, the local bourse returned to the negative zone as the index declined by 2.9 per cent to 22,118.90 points due to price depreciation in MTNN, Nestle and Zenith Bank.
Consequently, YtD return worsened to -17.6 per cent while market capitalisation dropped N350 billion to close at N11.5 trillion on Thursday.
Friday’s session saw the bulls regaining hold as the ASI closed in the green, up by 0.54 per cent to close at 22,198.43 points while market capitalisation garnered N42 billion to close at N11.568 trillion.
This meant that investors lost a total value of N278 billion and this could be attributed to the global fears of COVID-19, as well as the current instability in oil prices.
Analysts who spoke to Sunday Sun were quick to point out that drastic measures need to be in place to ensure panic buttons remain at least on hold.
Though President Muhammadu Buhari has approved a reduction in the price of Premium Motor Spirit (PMS) otherwise called petrol from N145 to N125, analysts say the move is unlikely to impact the market as uncertain times for the economy looms.
Chartered Financial analyst, FBNQuest Capital, Uwadiae Osadiaye, explained that the government’s new found flexibility was driven by rapidly declining global oil prices resulting from the global health pandemic and an on-going dispute between two of the world’s largest oil producers, Russia and Saudi Arabia.
Osadiaye noted that oil prices would remain subdued at around $30/barrel levels in H1 2020 while adding that the FG’s resolve to maintain the newly introduced market-driven pricing regime will likely not be tested as the expected market price for gasoline should comfortably remain below the previous N145/litre pricing ceiling, all things being equal.
“We note, however, that the present situation could change quickly and as such do not totally write off the possibility of an emergency OPEC meeting before June. For now though, it is considerate to write off any chances of a strong recovery in global oil prices over the next quarter.
“Although China is getting back on its feet, OECD economies – which account for almost half of global oil demand – are presently in the eye of the COVID-19 storm.
“Therefore, we expect global oil demand to remain weak for some time yet which could affect performance of equities too.”
On his part, the Chairman of the Committee on capital market, Senator Ibikunle Amosun, called for more participation from domestic investors and expressed determination to ensure that investments are safe in the Nigerian capital market (NCM).
His words: “We are well aware of the impact of the virus in our market today, but I want to assure you that we are doing everything humanly possible to ensure effective participation of investors especially the domestic ones. The capital market is a potent avenue of deepening our economy. We have always talked about diversification which is essential to growing the economy and that is why the capital market has to play a very significant role in that aspect.
“Let me reassure that we will create that enabling environment for investors as well as eke out necessary policies to support the market and so we are urging investors not to press the panic button yet”.
Meanwhile a total turnover of 2.804 billion shares worth N32.559 billion in 31,715 deals were traded this week by investors on the floor of the Exchange in contrast with a total of 3.964 billion shares valued at N43.703 billion that exchanged hands last week in 26,054 deals.
The Financial Services industry (measured by volume) led the activity chart with 2.508 billion shares valued at N25.292 billion traded in 23,243 deals; thus contributing 89.44 and 77.68 per cent to the total equity turnover volume and value respectively.
The Conglomerates followed with 60.873 million shares worth N105.948 million in 767 deals while the Services industry recorded a turnover of 51.296 million shares worth N117.545 million in 350 deals.
Trading in the Top Three Equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc (measured by volume), accounted for 1.635 billion shares worth N21.282 billion in 15,631 deals, contributing 58.32 and 65.37 per cent to the total equity turnover volume and value respectively.
Thirty-five equities appreciated in price during the week, higher than two equities in the previous week. Twenty- seven equities depreciated in price, lower than 64 equities in the previous week, while 101 equities remained unchanged, higher than 97 equities recorded in the preceding week.
