Investors lose N767b in one week as global market plunges

•Experts predict a gloomy outlook

The Nigerian Exchange Limited (NGX) was not immune last week as global equities plunged into the steepest declines since 2020 following aggressive interest rate hikes by central banks.

Consequently, the NGX market capitalisation depreciated by N767 billion from N28,681 trillion recorded at the close of transactions on Friday, June 10, 2022, to N27,914 trillion on Friday. The all-share index also plunged by 1,423.28 points or 2.7 per cent to 51,778.08 from 53,201.36.

Similarly, all other indices finished lower last week except the NGX Growth index, which appreciated at 2.79 per cent, while the NGX Asem index closed flat.

The downturn was driven by sell-offs in MTN Nigeria (-7.9 per cent), Bua foods (-7.9 per cent), Airtel Afr (-1.2 per cent), International Brewery (-15.0 per cent) and some banking stocks Consequently, the Month To Date (MTD) loss increased to -2.3.per cent while the Year To Date (YTD) return moderated to +21.2 per cent.

The stock market opened for four trading days as the Federal Government declared Monday, June 13, 2022, a public holiday to commemorate the 2022 Democracy Day celebration.

Also, last week, a turnover of 940.9 million shares worth N11.5 billion was recorded in 20,077 deals by investors on the floor of the Exchange.

This volume of shares traded was, however lower than a total of 1.8 billion units valued at N19.5 billion that changed hands in 21,723 deals during the preceding week.

Reacting to market performance, Vice President of Highcap Securities, David Adonri, said the rising insecurity in the country and other macroeconomic challenges, coupled with uncertainty in the global economy are fueling the decline in the equities market.

Analysts at Cordros capital said: “With the significant moderation in the prices of bellwether stocks this week, we expect savvy investors to take advantage of this and make a re-entry into stocks with sound fundamentals and attractive dividend yields.

“However, we do not rule out the possibility of continued profit-taking activities. As a result, we think the local bourse will likely exhibit a choppy pattern. Therefore, we advise investors to take positions in only fundamentally justified stocks.”

Analysts from Vetiva Dealing and Brokerage said: ” With continued sell-offs amid bearish sentiment in the market, we expect to see mixed trading sessions next week as investors continued to trade cautiously.”

Furthermore, the breakdown of last week’s transactions indicated that the financial services industry led the activity chart with 692.3 million shares valued at N6.2 billion traded in 10,615 deals. The sector contributed 73.58 per cent to the total equity turnover volume.

The conglomerate industry followed with 89.9 million units worth N247 million in 764 deals. The consumer goods industry ranked third with a turnover of 54.2 million shares worth N1.2 billion in 2,923 deals.

Trading in the top three equities namely United Bank for Africa Plc, Sterling Bank Plc and Transnational Corporation Plc (measured by volume) accounted for 304.8 million shares worth N1.3 billion in 2,103 deals, contributing 32.1 per cent to the total equity turnover.

A total of 2,722 units of exchange-traded funds (ETF) valued at N1.5 million were traded this week in 10 deals compared to 2,110 units valued at N168 transacted last week in 21 deals.

Also, 5,972 units of bonds valued at N6 million were traded in eight deals compared to a total of 126,082 units valued at N129.1 million that were exchanged in 14 deals.

13 equities appreciated during the week, lower than 29 equities in the previous week. F51 equities depreciated higher than 36 equities in the previous week while ninety-two equities remained unchanged.