Nigerian equities yesterday came under intense pressure, piling up a net loss of about N684 billion within the 10-hour trading sessions in the past two days.
Against the background of N425 billion on Tuesday, aggregate market value of all quoted shares dropped by N259 billion. The two-day loss surpassed the total net gain of N613 billion recorded in the previous week.
With nearly five losers to every gainer, aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE), which had opened this week at N9.926 trillion, dropped to N9.501 trillion on Tuesday and trended further downward to N9.242 trillion.
The All Share Index (ASI), the benchmark index for the Nigerian stock market, which had depreciated by 4.29 per cent on Tuesday, dropped further by 2.72 per cent, pushing the average year-to-date return deep into negative at 6.05 per cent.
The ASI dropped from its opening index of 28,902.25 points for the week to 27,663.16 points and 26,910.23 points on Tuesday and yesterday.
Banking stocks headlined the depreciation as investors grapple with uncertainties in the guided flexible foreign exchange policy announced by the Central Bank of Nigeria (CBN) last week amidst profit-taking transactions and month-end portfolio rebalancing. The apex bank announced the adoption of a flexible foreign exchange policy. However, the detailed guidelines on the implementation of the flexible exchange rate have not been released.
Average loss in the banking sector more than doubled the overall average loss in the entire market as most banking stocks tumbled under open sale orders, unrestricted sell orders, which sought to close the deals at any available price. The NSE Banking Index, which tracks the banking sector, dropped by 6.9 per cent, after the two most capitalised banking stocks-Guaranty Trust Bank and Zenith Bank – lost 9.6 per cent and 9.2 per cent respectively.
“We expect the current bearish trend in the market to continue as investors take profit following the impressive gains recorded in the previous week. However, we do not rule out the prospect of a change in tide, should the apex bank announce the expected modalities for a more flexible foreign exchange rate regime as indicated last week,” Afrinvest Securities stated in a post-trading review.
Seven banking stocks ranked among the top 10 losers, in percentage terms, with losses ranging around the 10 per cent maximum daily allowable percentage price change. Stanbic IBTC led the losers with 9.70 per cent. United Bank for Africa declined by 9.47 per cent. FCMB Group dropped by 9.36 per cent. Skye Bank depreciated by 8.40 per cent while Access Bank dropped by 6.88 per cent.
Total turnover stood at 352.29 million shares valued at N3.85 billion in 5,024 deals. Zenith Bank was the most active stock with a turnover of 56.73 million shares valued at N770.38 million. Guaranty Trust Bank followed with a turnover of 39.46 million shares worth N696.6 million while Transnational Corporation of Nigeria recorded a turnover of 30.47 million shares valued at N37.24 million.
Further sectoral analysis showed widespread selling sentiments. The NSE Consumer Goods Index dropped by 2.9 per cent. The NSE Industrial Goods Index declined by 1.5 per cent. The NSE Oil and Gas Index slipped by 1.3 per cent while the NSE Insurance Index dipped by 0.8 per cent.
The Federal Government is to inject N6.5 billion into the capital market, Chairman, Senate Committee on Capital Market, Senator Isiaka Adeleke, has said.
The news is coming even as senators and members of the House of Representatives yesterdaybegan the process of shoring up the dwindling fortunes of the capital market.
