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By Chinwendu Obienyi
Despite the declassification of Nigerian Exchange Limited (NGX) from “frontline” to “unclassified” market by FTSE Russell, a global index provider, investors on the trading floor showed no panic as the volume of stocks traded rose by 32 per cent in two consecutive trading days.
FTSE Russell had on Monday, noted that the reclassification, which came as a result of the FX scarcity in Nigeria, is set to take effect on September 18, 2023. However, despite prompt selloffs on the nation’s bourse, the volume of stocks traded grew by 24.11 per cent to 645.54 million units at the close of transactions on Tuesday.
Coupled with 7.58 per cent to 520.15 million units recorded on Monday, this meant that the volume of stocks traded grew by 31.69 per cent. Further analysis of the market performance showed that the value of stock traded grew by 32.06 per cent to N11.01 billion, exchanged in 10,554 deals. This is against N8.34 billion and 9,916 deals recorded in the previous trading session.
Transcorp led the activity chart with the sale of 87.82 million units valued at N491.6 million. UBA traded 75.84 million units worth N103.59 million while AccessCorp sold 69.44 units valued at N1.05 billion.
Despite the increased trading volume, the market’s All-Share Index (ASI) declined by 0.80 per cent to close at 66,760.20 points from the previous trading session. Market capitalisation also decreased by N293 billion, closing at N36.538 trillion.
As a result, the market’s year-to-date (YTD) return moderated at 30.26 per cent. Across the counters of the market, the Banking (-2.6 per cent), Insurance (-2.3 per cent), and Consumer Goods (-1.7 per cent) indices declined, while the Industrial Goods and Oil & Gas indices closed flat. Market breadth remained negative as 45 stocks depreciated in value while 16 others appreciated in value. Regal Insurance (-10 per cent) and eTranzact (-10 per cent) topped the losers’ list, while Chellaram (+10 per cent) and CWG (+10 per cent) recorded the most significant gains of the day.
Reacting to the development, market analysts noted that despite the reclassification, investors remained active.
They suggested that investors would look for attractive dividend-paying stocks, and there might be profit-taking activities on stocks that recently experienced notable appreciation.
They said, “Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic story remains a significant headwind to corporate earnings”.
