Investors Lose N119bn as Sell Pressures Cut Stock Market Deep
Equities investors in the equities segment of the Nigerian Exchange lose about N119 billion over the bears’ rampage in the local bourse. Most impacts were felt in the banking index as valuation become cheaper in the just concluded week.
Stock traders told MarketForces Africa that institutional investors have been weighing their options, balancing portfolios in reaction to the hot red inflation figure that crossed 17 years high, according to the latest data from the statistics office.
With retail and institutional reshuffles, trading activities in the domestic bourse ended on a negative note in the just concluded week on account of large selloffs in heavyweight and mid-cap stocks.
Profit-taking dragged market performance indicators downward by 0.44% week on week while year-to-date return moderated further to 15.82% – a mile away from the headline inflation rate of 20.52%.
According to stock market trading data, the All-share index (ASI) closed the week at 49,475.42 points as well as the market cap of traded equities took the same direction, according to stockbrokers.
In the just concluded week, equities market capitalisation printed at N26.69 trillion, recording a N118.5 billion loss in 4 out of 5 sessions. Trading activity in the week was sustained as the total traded volume tanked 24.3% week on week to 719.4 million units.
Also, the total weekly traded value went the same direction, lower by 14.1% to N8.02 billion while deals traded for the week dipped 5.8% to 17,447 from 18,525 deals last week. READ: Investors Lose as Bear Returns to Stock Market
In a market note, stockbrokers at Cowry Asset said they expect the market to sustain its bearish trend in the absence of a major catalyst to trigger strong momentum as portfolio rebalancing activities take the center stage.
“Thus, we expect the bulls and bears to share the market leadership. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook”.
Large impacts were felt from sell-offs in some banking stocks dragging the local bourse performance. Last week, FBNH’s share price was 5.7% lower while ACCESSCORP lost 6.2%. UBA fell by 6.0%, ZENITH BANK declined by 1.5% and UBN (-4.2%) – led the weekly loss.
REDSTAREX dropped off 13% of its market price, FCMB shed 8%, and UACN is now 7% cheaper along with, FIDELITYBK which also lost 7%. Market data shows that sectorial performance was negative as all five sectors posted losses.
The Banking (-3.3%) index led the decliners, followed by the Insurance segment which tracked lower by 2.6%. The consumer goods index was down 0.3% while Industrial goods lost 0.2% and Oil & Gas slowdown 0.2% as of Friday’s close.
“We expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the second quarter of 2022 earnings season amid the yield uptick in the fixed income market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated”, Cordros Capital said.
