Sell pressures deflate stock market as investors lose N2.3trn in 5 days

By Peter Egwuatu 

THE Nigerian stock market deepened its bearish run last week, driven by sell pressures  among the blue chip companies in almost all the sectors of the market.

As a result, the major performance indicator of the market,  Nigerian Exchange Limited, NGX, All Share Index (ASI) fell by 2.51% to close at 141,004.14 points.

Consequently, the Year-to-Date, YtD  return moderated to 36.9% from the 40.52% recorded in the previous week. 

Market capitalisation, another major performance indicator, which reflects total value of listed shares also shed N2.29 trillion or -2.51% Week on Week, W/W, to close at N89.208 trillion.

Market sentiment was dampened by sustained sell pressure in industrial goods heavyweights, Dangote Cement, which declined -9.88%  W/W followed by BUA Cement -9.96% and WAPCO -2.50%.

Furthermore, the banking sector also recorded decline, with GTCO posting a loss by -3.79% W/W, Zenith Bank -3.31% , Stanbic IBTC  -15.39% , First Holdco -1.07% and Access Corporation -3.40% .

These selloffs outweighed gains in select consumer goods sector, with Dangote Sugar recording 7.24% gain W/W, International  Breweries 4.84% and Unilever Nigeria 6.99%. 

Across the major sectors, all indices closed in the red excluding the Consumer Goods Index posting 0.83% W/W, underscoring the broad-based selling pressure during the week under review .

Meanwhile, market report further showed that a total of 4.773 billion shares worth N 107.426 billion in 152,965 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 8.564 billion shares valued at N99.936 billion that exchanged hands the previous week in 177,870 deals. 

The Financial Services Industry (measured by volume) led the activity chart with 3.734 billion shares valued at N60.627 billion traded in 72,977 deals; thus contributing 78.24% and 56.44% to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 370.404 million shares worth N14.025 billion in 17,997 deals. Third place was the Services Industry, with a tumover of 176.285 million shares worth N1.279 billion in 8,790 deals. 

Trading in the top three equities, namely Universal Insurance Plc, Zenith Bank Pic and FCMB Group Plc (measured by volume), accounted for 1.201 billion shares worthN29.433 billion in 10,537 deals, contributing 25.16% and 27.40% to the total equity turnover volume and value respectively. 

Reacting to the bearish market, analysts at InvestData Consulting Limited stated: “We expect selling sentiments to continue on profit taking in the midst of sector rotation and bargain hunting.  As players digest economic and corporate numbers in the face of portfolio rebalancing and cautious trading, while investors buy into value in the midst of portfolio reshuffling, even as few quarterly reports are expected to hit the market.

“Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”

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