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Chinwendu Obienyi
On the back of a glut-induced fall in demand for oil, prices plummeted to their lowest levels in 17 years as the global oil market battles the double threats of headwinds from the coronavirus pandemic and the continuing deadlock on Saudi-Russia oil price rivalry.
Brent crude, the international benchmark for Nigeria’s Bonny Light, cratered to $22.34 per barrel yesterday, precisely around 5:14pm -its lowest level since November 15, 2002, while the US West Texas Intermediate (WTI) crude futures slipped by $20.47, pretty close to an 18 year low. There are fears that prices could drop further in the days ahead as investors in Nigeria’s stock market reacting negatively to the news.
At the close of yesterday’s proceedings, the market’s All Share Index (ASI) fell 2.43 per cent to close at 21,330.79 points.
Consequently, investors lost over N278 billion from N11.4 trillion on Friday to close yesterday’s trading session at N11.116 trillion while year-to-date (YTD) stood at -20 per cent.
At the close of transactions, the volume of stocks traded stood at 466.90 million units while the value of stocks traded stood at N1.93 billion in over 3,659 deals.
Reacting to the development, market analysts predicted that the market would continue to embark on bear run and advised investors to take positions in fundamental stocks. For instance, analysts at Cordros Capital said, “In our view, the trend is likely to persist as weakening market sentiment in the face of the fast-spreading coronavirus pandemic and the weakness across global markets are expected to pressure market returns. Nonetheless, we advise investors to take positions in fundamentally justified stocks”.
For their part, Analysts at Afrinvest said, “We believe that the market would continue on a downtrend due to a weak and uncertain economic environment”.
On the price chart, MTNN led 14 others on the losers’ chart with 10 per cent to close at N90 per share. Wema Bank followed with 9.62 per cent to close at 0.47 kobo, International Breweries dropped 9.26 per cent to close at N4.90, Prestige lost 8.33 per cent to close at 0.55 kobo while UCAP decreased by 8.33 per cent to close at N2.20.
Berger led 10 other stocks on the gainers’ chart with 9.84 per cent to close at N6.70 per share. Mobil trailed with 9.84 per cent to close at N160.90, Cadbury gained 9.63 per cent to close at N6.80, Meyer rose by 8.70 per cent to close at 0.50 kobo while Africa Prudential garnered 8.19 per cent to close at N3.70.
Meyer was the most active stock, trading 200.98 million shares valued at N92.46 million. Champion sold over 89.33 million shares worth N61.67 million while Zenith Bank transacted 48.19 million shares valued at N574.35 million.
