Home Uncategorized How global uncertainty down equities market by N1.2trn in February

How global uncertainty down equities market by N1.2trn in February

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Due to global economic uncertainty that led to investors profit-taking in key fundamental stocks, the equities market of the Nigerian Stock Exchange (NSE) has dropped by N1.2trillion in February 2020. 

The market capitalization for all listed equities on the NSE closed the month under review at N13.66trillion 8.1 per cent or N1.2trillion decline from N14.86trillion the equities market closed for trading in January.

The equities market suffered the biggest weekly loss last week since April 2019 with investors exiting on increasing regulatory risk in the banking sector, a slump in oil prices, and as the first case of the Coronavirus was reported in Lagos on Friday morning.

Consequently, the benchmark index, the NSE All-Share Index dropped by 9.11 per cent to 26,216.46 basis points from 28,843.53 basis points reported when the market opened for trading in February 2020.

The 9.11 per cent decline in February is the worst monthly loss since January 2016, dragging the equities market Year-Till-Date(YtD)  performance to -2.33 per cent.

Our correspondent gathered that the equities market suffered a heavy decline in the last week of February, dropping by 4.3 per cent with fundamental stocks reporting huge profit-taking.

The decline was driven primarily by selloffs in Guaranty Trust Bank plc that dropped by 14.8 per cent, MTN Nigeria with a decline of 5.2 per cent and Nigerian Breweries plc that depreciated by 16.4per cent, bringing the equities market into negative territory for the first time in 2020.

Analysing the performance by sectors, the Banking Index drops by 11.8 per cent to 315.50 basis points from 357.65 basis points, while the Insurance Index dropped by 8.2per cent to 116.30 basis points from 126.71 basis points

The Consumer Goods Index last week dropped by 3.8 per cent to 934.02 basis points and Oil & Gas depreciated by 2.1 per cent to 234.01 basis points from 239.12 basis points.  

The Industrial Goods index, however, gained 1.08 per cent to 1,214.60 basis points from 1,201.64 basis points with the sole gainer on interest in BUA Cement share that rose by 1.92 per cent.

“Amidst continued weak market sentiments, we advise investors to trade cautiously, taking positions in fundamentally justified stocks,” said analysts at Cordros capital.

However, the weekly market report of the NSE stated that “A total turnover of 1.547 billion shares worth N24.263 billion in 21,646 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.499 billion shares valued at N17.907 billion that exchanged hands last week in 18,515 deals.

“The Financial Services industry (measured by volume) led the activity chart with 1.267 billion shares valued at N17.205 billion traded in 15,149 deals; thus contributing 81.91 per cent and 70.91per cent to the total equity turnover volume and value respectively.

“The Conglomerates followed with 84.990 million shares worth N180.885 million in 654 deals. The third place was the Consumer Goods industry, with a turnover of 65.965 million shares worth N3.918 billion in 2,235 deals.

“Trading in the Top Three Equities namely, Guaranty Trust Bank Plc, United Bank for Africa Plc, and Zenith Bank Plc. (measured by volume) accounted for 800.054 million shares worth N14.972 billion in 8,379 deals, contributing 51.72 per cent and 61.70 per cent to the total equity turnover volume and value respectively.”

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