Investors Lose N248bn as Bears ‘Raid’ Nigerian Bourse
Equities investors’ wealth plunged by about N248 billion as bears raided the Nigerian Exchange in the just concluded week. The latest negative price movement drags the market downward amidst elevated interest rates on fixed interest securities.
As equities investors and other participants turned their focus to delays in banks’ audited financial statements ahead of the upcoming monetary policy committee meeting, the market closed lower. This led to cautious positioning amidst low traded volumes and a mildly positive market breadth, Cowry Asset Management Limited said in a note to investors.
Even though there was a lot of interest in financial stocks, stockbrokers reported that the benchmark index fell by 0.42% week over week to 104,647.37 points. Consequently, investors’ year-to-date return moderated to 39.95% amidst a high inflation rate condition that printed at 31.70% in the February reading.
The week’s trading activity stayed low, according to stockbrokers, with the weekly traded volume and value falling by 7.78% and 2.14%, respectively, to 1.74 billion units and N48.76 billion. According to information from the Nigerian Exchange, total weekly deals increased by 1.17% week-on-week to 45,237 deals. Sectoral performance for the week was mostly positive, according to information from the domestic bourse, except for the CONSUMER GOODS index.
The consumer index recorded a modest loss of 0.37% week-on-week. This was attributed to adverse price movements in PZ CUSSONS following disapproval from the SEC regarding their plan to buy out minority shareholders. Conversely, the BANKING, INSURANCE, INDUSTRIAL, and OIL & GAS sectors experienced gains, driven by upward movements in the prices of key stocks.
Individual stock performances varied, with JULI (46.1%), NEM (45.1%), INTENEGINS (23), JAIZBANK (20.4), and INTBREW (18.2) leading the gainers with notable share price advances. On the other hand, JBERGER (17.1), DAARCOMM (14.1), DEAPCAP (12.5), MTNN (12), and PZ CUSSONS (10%) emerged as major losers, contributing to notable price declines week-on-week.
“With regard to the upcoming week, Cowry Asset Limited predicts a mixed performance in the equities market subsequent to the conclusion of the monetary policy committee meeting.” The firm said expectations for upward movement in interest rates may influence market sentiment, anticipating continued portfolio rebalancing activities toward the end of the first quarter of 2024.
Ahead of the first quarter of 2024 corporate releases and dividend-earning seasons, Cowry Asset Limited hinted to investors in its update that fund managers would likely engage in window-dressing. The capitalization of the equity market fell by N247.6 billion overall, ending the week at N59.17 trillion. Benchmark Interest Rate on Nigerian Bonds Increases to 19.21%
