Investors lose N305bn as market capital drops for sixth consecutive week

INVESTORS lost N305 billion at the floor of the Nigeria Exchange Limited (NGX) in the just concluded week as the stock market depreciated for the sixth consecutive time.

The market capitalisation, which represents the total market value of all companies’ stocks on the Exchange, fell by 1.08 per cent to N27.963 trillion on Thursday, April 20, from N28.268 trillion it opened with on Monday, April 17.


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Similarly, the All-Share Index (ASI) depreciated by 1.08 per cent to close the week at 51,355.74 basis points (bps).

Despite investors’ renewed buying interest in mid and large stocks, as well as their interest to position for the first quarter financial earnings released by more quoted companies, the stock market continued to witness a negative performance.

As a result, some investors sought safer investments in fixed income assets, like bonds, to hedge against inflation and leverage on attractive fixed income yields.

Investors’ interest in stocks were further choked by headline inflation, which rose to 22.04 per cent in March from 21.91 in February, coupled with other monetary and fiscal challenges.

“We opine that the trend in headline inflation will continue to be on an upward trajectory on the back of season-induced cost pressure from household commodities during the Easter and Ramadan celebrations witnessed in April.

“Also, we consider the plan by the Federal government to implement the new pay structure of 40 per cent salary increment for the public sector workers, and the expected conditional cash transfer to vulnerable households to be among other driving factors,” analysts at Cowry Asset Management stated.

A look at the sector indices showed that performance was largely on a mixed trend except for the insurance and consumer goods sectors, which appreciated by 1.14 per cent to close at 180.72bps and 0.17 per cent to 699.91bps

The share price of Transnational Corporation (Transcorp) rose considerably by 44.97 per cent to close at N2.45 from N1.69. Many stock market watchers believed this was not unconnected to the about 2.245 billion or N5.5 billion shares that Nigerian billionaire businessman Femi Otedola bought to emerge the largest single individual shareholder in the company. Transcorp’s total market capitalisation currently stands at N99.59 billion.

On the reverse, the banking index fell by 2.54 per cent to close at 430.74bps; the oil and gas index dropped by 1.43 per cent to 502.95bps; and the industrial index declined by 0.17 per cent to 2,441.37bps.

Zenith Bank led the losers’ table as the company’s share price lost N3.05 to close at N21.95.

    Drop in stock market value in the last six weeks. Chart by The ICIR
    Drop in stock market value in the last six weeks. Chart by The ICIR

    The stock market traded for four days to mark the Eid el-Fitr celebration as the Federal government declared Friday, April 21, 2023, and Monday, April 24, public holidays.

    However, a total turnover of 3.920 billion shares worth N15.62 billion in 16,856 deals was traded by investors on the floor of the Exchange, in contrast to a total of 2.824 billion shares valued at N10.96 billion that exchanged hands in the previous week in 15,686 deals.

    The conglomerates industry, measured by volume, led the activity chart with 3.050 billion shares valued at N5.964 billion traded in 1,379 deals, and contributed 77.81 per cent and 38.18 per cent to the total equity turnover volume and value respectively.

    Transcorp, Access Holdings and Fidelity Bank topped, measured by volume, equities trading, accounting for 3.302 billion shares worth N7.999 billion in 2,375 deals, and contributed 84.23 per cent and 51.21 per cent to the total equity turnover volume and value respectively.

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