Equities Investors Lost N635bn in Nigerian Stock Market
The Nigerian Exchange (NGX) lost about N635 billion last week amidst selloffs in the mid and large-cap stocks. There were selloffs in the local bourse from Monday to Thursday but the exchange halted the downward trend on Friday.
Consequent to the profit-taking, the NGX benchmark index declined 2.2% week on week to 52,908.24 points, with year to date returns moderated to 23.9%. During the bullish run, the equities market year to date return had peaked at 26.6%, a healthy return that was seen in the pre-financial crisis in 2008 before it started slowing down.
Overall, the equity segment of the Nigerian Exchange market capitalisation shrank to ₦28.5 trillion on Friday. Stockbrokers said there were pressures from profit-taking activities as investors look into yield repricing mode in the fixed income market.
Since the apex bank monetary policy committee’s 150 basis points interest rate, a dark cloud had started pouring into the equity market as investors rebalance portfolios. Pension Funds Administrators’ portfolios were adjusted due to widening negative real return on assets in the fixed income market earlier in the first quarter.
After an exit from Nigerian Treasury Bills due to spot rates price down in the first three months of 2022, PFAs had garnished their investing appetite by taking positions in risky banks placement, a move that was criticised by some analysts.
Driving the weekly losses, shares of OKOMUOIL declined by 10.0%, PRESCO lost 10.0%, NB dipped 8.1%; WAPCO closed lower by 4.1%, and MTNN was down 3.0%. Stockbrokers said subsequent to a block-divestment in UBN last week, the total volume traded increased significantly to 28.74 billion from 1.84 billion, valued at N209.06 billion.
Market data shows that sectoral performance was broadly negative as losses in the Insurance (-5.5%), Industrial Goods (-3.7%), Consumer Goods (-2.5%), Banking (-0.7%), and Oil and Gas (-0.4%) indices reflected the overall negative sentiments in the market.
“We believe a “choppy theme” will be the overarching theme in the local bourse as investors continue to pay close attention to the direction of yields in the fixed income market”, Cordros Capital said in a market report. READ: Stocks Edge Lower as Investors Maintain Selloffs
Following the moderation in the share prices of bellwether stocks last week, stock traders said they see scope for the bulls to make a re-entry in stocks with attractive dividend yields. #Equities Investors Lost N635bn in Nigerian Stock Market
