Persistent free fall in share prices drags index further by 2.41%

The sustained bearish sentiment, leading to selloffs in the most capitalized stocks, continued to take tolls on the benchmark All-Share Index (ASI) of the Nigerian Stock Exchange (NSE) last week.

During the period, many stocks were forced to the new lower level, as the bear dominance increased since the first week in May, as ASI depreciated by 2.41 percent to close at 28,566.9 points. Similarly, all other indices finished lower with the exception of the NSE Banking Index that rose by 0.78 percent, while the NSE ASeM Index closed flat.

Analysts linked the unprecedented lull in the nation’s stock market to the absence of fiscal stimulus that would complement efforts by the regulators to restore the market to sustainable recovery.

The Managing Director of Investdata Consulting Limited, Ambrose Omodion said: “The leadership style of this government and its non-implementation of the 2019 budget that was passed into law since May, continues to send wrong signals to investors, feedback of which we are seeing in the stock market today.

“Nonetheless, the ongoing pullback has created opportunities for accumulation, but we advise investors and traders to be cautious. They should target fundamentally sound stocks with a history consistent dividend payout whose business model supports growth.”

Further breakdown of last week’s trading showed that a total turnover of 988.491 million shares worth N13.839 billion was recorded in 16,414 deals by investors on the floor of the exchange in contrast to a total of 1.025 billion shares valued at N9.911 billion that exchanged hands in 19,375 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 769.350 million shares valued at N7.238 billion traded in 8,530 deals; thus contributing 77.83% to the total equity turnover volume.

The conglomerate’s Industry followed with 55.223 million shares worth N92.483 million in 719 deals. The third place was the ICT Industry with a turnover of 42.080 million shares worth N4.144 billon in 839 deals.
Trading in the top three equities namely, Zenith Bank Plc, FBN Holdings Plc and Wapic Insurance Plc (measured by volume) accounted for 348.839 million shares worth N3.520 billion in 2,703 deals, contributing 35.29 percent to the total equity turnover volume.

A total of 1,115 units valued at N165,837 were traded this week in three deals compared with a total of 12,375 units valued at N6.223 million that was transacted last week in eight deals. A total of 756 units of Federal Government Bonds valued at N730,454.35 were traded this week in seven deals compared with a total of 1.007 million units valued at N1.024 billion transacted last week in 14 deals.

Also, 18 equities appreciated in price during the week, lower than 21 in the previous week. 39 equities depreciated in price, lower than 44 equities in the previous week, while 111 equities remained unchanged, higher than 103 equities recorded in the preceding week.

Source: The Guardian, July 15, 2019