Equity market posts N930bn loss

At the close of Wednesday’s trading session on the Nigerian Stock Exchange, the equity market experienced a decline, losing N930.62bn, which marks the third consecutive loss in the market.

On Tuesday, the Nigerian Stock Exchange witnessed a bearish performance at the close of trading, with the market capitalisation declining by N1.06tn, marking a drop in value.

On Monday, the Nigerian Stock Exchange saw a loss of N51bn in market capitalisation, closing at N64.3tn.

The day’s figures showed a 16 per cent drop in volume, a 41 per cent decrease in turnover, and a seven per cent decline in deals. The Nigerian Stock Exchange’s current market capitalisation is N62.3tn.

The All-Share Index closed lower at 102,095.95, reflecting a decrease of 1,526.14 points, or 1.47 per cent. The index has recorded a loss of 2.05 per cent in one week but has gained 2.73 per cent in four weeks. However, year-to-date, the index has seen a marginal decline of 0.81 per cent.

Among the top gainers, National Salt Company led the charge, closing at N38.50 per share, up by 10 per cent. Dangote Sugar Refinery followed suit with a 10 per cent increase, closing at N36.85 per share. Sunu Assurances Nigeria and Skyway Aviation Handling Company also saw strong growth, appreciating by 10 per cent and 9.95 per cent respectively, with closing prices of N6.71 and N33.15 per share.

On the other hand, the worst-performing stocks were led by Dangote Cement, which lost 10 per cent, closing at N387.90 per share. Universal Insurance Company followed closely with a 10 per cent decline, ending at N0.63 per share. John Holt (-9.99 per cent) and Transcorp Power (-9.97 per cent) were also among the losers, closing at N8.47 and N324.00, respectively.

Universal Insurance recorded the highest trading volume, with 70.3 million shares exchanged. Aiico Insurance followed with 39.7 million shares, while Access Holdings and Livestock Feeds both saw 16.8 million shares traded.

In terms of sector performance, several indices experienced mixed results. The Top 30 Index saw a 1.63 per cent decline, while the Consumer Goods Index registered a 0.99 per cent increase. The Oil & Gas Index edged up by 0.15 per cent, while the Banking Index showed a modest rise of 0.02 per cent. However, the Pension Index fell by 0.37 per cent, and the NGX Main Board Index saw a decline of 0.52 per cent.

A broker and board member of Highcap Securities, David Adonri, attributed the drop to the decline of Dangote Cement, stating that the impact on the market from such a highly capitalised stock is always severe.

Adonri, while speaking about the market movement, said, “Whenever a highly capitalised stock like Dangote Cement declines massively, the impact on the market is usually very severe. There is no price-sensitive information available yet to explain the cause of the big decline.”

Despite the broader market being weighed down by numerous stocks that lost value, Adonri noted that there were no significant changes from the macroeconomy to justify such a drastic drop in stock prices. “Although very many stocks lost today compared to gainers, there is nothing from the macroeconomy that has changed to warrant such a loss,” he remarked.

One possibility, according to Adonri, is that investors may have been liquidating some of their positions to replenish the funds spent during the end-of-year celebrations, anticipating early-year financial obligations. “Investors may have sold to replenish the funds they expended for end-of-year celebrations in order to meet early-year financial obligations,” he suggested.

In addition, he observed that the bull run in the insurance sector, which had previously propelled market appreciation, seems to have slowed down, with fatigue setting in. “Finally, it appears that fatigue has set in, halting the bull run in the insurance sector that propelled market appreciation in the past few weeks,” he added.

The PUNCH reported that the Nigerian Stock Exchange witnessed a bearish performance at the close of trading on Tuesday, with the market capitalisation declining by N1.06tn, marking a drop in value.