Investors’ fortune plunge as sell pressure hit banking stocks amid COVID-19 fear

Investors’ fortunes declined as bear knocked off ₦329.4 billion from stock value as fear of coronavirus, falling oil prices hit the Nigerian Stock Exchange.

On Monday, trading activities opened the week negative amid threat of persistent decline in global oil prices on Nigeria’s economy.

The All-Share index fell 241 basis points (bps) to 25,647.54 points due to sell pressures in GUARANTY (-10.0%), ZENITH (-9.8%) and STANBIC (-10.0%).

Consequently, investors lost ₦329.4 billion as market capitalisation declined to ₦13.4 trillion while the year to date  loss worsened to -4.5%.

Activity level dipped as volume and value traded declined 48.6% and 57.3% to 185.6 million units and ₦1.8 billion respectively.

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The most actively traded stocks by volume were ZENITH at 53.5 million units, TRANSCORP 23.1 million units and GUARANTY 15.2 million units.

Meanwhile, ZENITH at total value of ₦907.1 million, GUARANTY ₦336.8 million and STANBIC  ₦167.4 million led by value.

Performance across sectors was bearish save the Industrial Goods and AFR-ICT indices which closed flat.

At decline rate of 9%, the Banking index lost the most, following 10% price depreciation in GUARANTY and ZENITH respectively.

Similarly, the Consumer Goods and Insurance indices were down 2.5% and 2.4% respectively, on the back of sell-offs in NIGERIAN BREWERIES (-9.9%), UNILEVER (-10.0%) and CORNERSTONE (-10.0%).

Lastly, the Oil & Gas a indices closed lower at -1.4% due to price declines in OANDO (-10.0%) and CONOIL (-10.0%).

Investor sentiment as measured by market breadth (advance/decline ratio) declined to 0.03x from the 1.2x recorded in the previous trading session as 1 stock advanced relative to the 38 that declined.

The best performing stock was CHIPLC (+7.1%) while STANBIC (-10.0%), UCAP  (-10.0%) and NAHCO (-10.0%) led the laggards.

“With the widespread of COVID-19 inducing a four-year low in global crude oil prices, we believe the dark clouds are gathering”, Afrinvest said.

As such, analysts expect investors to remain risk-averse towards the equities market in the near term.

Although there is headroom for bargain hunting activities due to cheap valuation of stocks and the local bourse relative to peers, Afrinvest held.

Investors’ fortune plunge as sell pressure hit banking stocks amid COVID-19 fear

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