NGX Sheds 183 Billion in Market Capitalisation

Investors at the Nigerian Stock Exchange recorded a loss on the second day of trading this week. Market capitalisation shed N183 billion, according to the analysis from top market analysts, which predicted that the NGX market might experience a bearish run this week as traders look into securing their portfolio by engaging in selloffs of equities following the forthcoming dividend payouts. However, Monday trading was positive as market capitalisation was up by N101 billion to close with a total of N55.836 trillion.

The NGX All-Share Index (ASI) declined by 0.33% or 334.62 points, to close at 101,707.70 points. Similarly, market capitalisation, which fell by N183 billion, finished at N55.653 trillion.

The loss experienced yesterday was due to price depreciation in large and medium-capitalised stocks, including Guinness Nigeria, PZ Cussons Nigeria, Zenith Bank, Nigerian Breweries, and United Bank for Africa (UBA).

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As measured by market breadth, market sentiment at the NGX was negative, as 24 stocks gained relative to 29 losers. 

Top Gainers: Honeywell Flour Mills led the chart with 9.92% to close at N4.32 per share. Juli followed with a gain of 9.90% to close at N1.11, while Cornerstone Insurance rose by 9.88% to close at N2.67 per share.

Associated Bus Company rose 9.76% to close at 90 kobo, while Veritas Kapital Assurance added 9.59% to close at 80 kobo per share. 

Top Losers: PZ Cussons Nigeria led with 9.87% to close at N25.10, while Morison Industries followed with a decline of 9.84% to close at N2.75 per share. eTranzact International and CWG lost 9.70% each to close at N6.05 each, while Sovereign Trust Insurance shed 9.62% to close at 47 kobo per share.

Total volume traded rose 8.56% to 263.192 million units, valued at N4.301 billion, and exchanged in 8,614 deals.

Transactions in the shares of Veritas Kapital Assurance are reported to have led the activity with 49.075 million shares worth N39.009 million. UBA followed with 24.342 million shares valued at N587.502 million, while Fidelity Bank traded 20.075 million shares valued at N217.331 million.

Transnational Corporations (Transcorp) traded 17.916 million shares worth N235.277 million, while Zenith Bank traded 16.018 million shares worth N578.151 million.

Back Story

Analysts predict that the current bearish trend may persist as investors seek refuge in fixed-income instruments due to the recent high yields seen amid dividend expectations and increased market volatility ahead of the January Consumer Price Index (CPI) data from the NBS and the impending Monetary Policy Committee meeting this February.

However, a pullback at this juncture is expected to strengthen upside potential. Amidst all these, we continue to advise investors to take positions in stocks with consistent track records of dividend payments and solid fundamentals and growth prospects to support earnings growth.