Investors lose N15.5bn as highly capitalized stocks fall

Janefrances Chinwe Iwuchukwu

Last week, the Nigerian stock market ended bearish due to price declines recorded by most highly capitalized stocks. Consequently, investors lost over N15.5 billion during the week.

Meanwhile, analysts anticipate that investors’ sentiments may be on the uptick this week as they await favourable half year earnings from some blue chip companies across the sectors.

According to analysts at Afrinvest Research, “We anticipate a halt in the bearish sentiment in the coming week as investor confidence improves.”

Analysts at United Capital stated: “Looking ahead, we expect the overall interest in Sub Saharan African equities to strengthen as more countries continue to ease lockdown policies and businesses begin to re-open. Also, the low interest rate environment in the developed market, the continued rollout of monetary and fiscal monetary stimulus and our expectation for currencies within the region to strengthen as external as well as domestic conditions improve, should spur a renewed foreign interest in the region.”

Meanwhile, analysis of the market last week showed that the bearish run on the Nigerian Stock Exchange, NSE persisted as gains on Tuesday (30 bases points, bps) , Wednesday (75bps) and Friday (13bps) were insufficient to lift the market following the losses on Monday (-1.3%) and Thursday (-1.0 bps).

Hence, price declines in Nestle Nigeria (-6.5%), BUA Cement (-2.5%) and Dangote Sugar (-0.9%) drove the benchmark index south by 12bps to close at 24,306.36 points on Friday.

Accordingly, market capitalization of the NSE which represents value of investment fell to N12.7 trillion as investors lost N15.5billion while Year to Date, YtD loss worsened to -9.4%.

Activity level varied as average volume declined 6.3% to 180.3 million units while average value traded advanced 46.5% to N2.7 billion. Guaranty Trust Bank (121.9 million units), Fidelity Bank (91.8 million units) and Zenith Bank ( 55.8 million units) were the most traded by volume while MTN Nigeria (N4.8billion), Guaranty Trust Bank (N2.6billion) and Zenith Bank (N917.5million ) led by value.

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