SELL-OFFS IN BANKING STOCKS DRIVE MARKET N197BN LOWER
Banking stocks listed on the Nigerian Stock Exchange led the decrease in market capitalisation by N197bn in one day, following sell-offs witnessed on Monday. The market capitalisation of equities listed on the NSE dropped from N12.804tn, which the market closed at on Friday, to N12.607tn at the end of trading on Monday. Banking stocks had last week led the increase in market turnover by N876m.
The equities market recorded a total turnover of 1.381 billion shares worth N15.504bn in 14,528 deals by investors on the floor of the Exchange last week, in contrast to a total of 1.044 billion shares valued at N14.628bn that exchanged hands the previous week in 14,974 deals. The NSE said in its weekly market report that the financial services industry (measured by volume) led the activity chart with 1.019 billion shares valued at N11 .814bn traded in 8,275 deals; thus contributing 73.82 per cent and 76.20 per cent to the total equity turnover volume and value, respectively.
The healthcare industry followed with 170.905 million shares worth N49.097m in 281 deals. The third place was occupied by the conglomerates industry with a turnover of 83.560 million shares worth N205.786m in 736 deals. On Monday, analysts at Afrinvest Securities Limited said sell-offs in MTN Nigeria Communications Plc, FBN Holdings Plc and Ecobank Transnational Incorporated dragged the All-Share Index 1.6 per cent lower to close at 26,115.80 basis points as the year-to-date loss settled at 16.9 per cent.
Activity level was mixed as volume traded fell by 44.7 per cent to 188.791 million units while value traded climbed by four per cent to N2.4bn. In terms of sectoral performance, the AFR-ICT lost the most, paring 3.7 per cent on the back of sell-off in MTN while price depreciation in Ecobank and Guaranty Trust Bank Plc dragged the banking index down by 0.8 per cent.
The industrial and consumer goods indices also declined by 0.31 per cent and 0.18 per cent, respectively, owing to price decline in Cement Company of Northern Nigeria Plc and Dangote Sugar Refinery Plc. Conversely, the oil and gas and insurance indices gained 0.62 per cent and 0.45 per cent, respectively, due to buying interest in Oando Plc, Linkage Assurance Plc and Aiiico Insurance Plc. Investor sentiment strengthened as market breadth (advance/decline ratio) jumped to 1.2x from the 0.6x recorded on Friday.
A total of 17 gainers were recorded, led by Japaul Oil and Maritime Services Plc, while Cornerstone Insurance Plc led 14 losers. “We expect bearish performance to persist in the near term as investors maintain a risk-off attitude towards the equities market. However, this is a good time to cherry-pick fundamentally sound stocks,” analysts at Afrinvest said.