NGX Thursday Trading Goes Down by N252 billion

Nigerian stock investors lost N252 bn at the close of Thursday trading as the Nigerian Exchange sustained its bearish trading on Thursday.

So far, the market has witnessed a combined loss of N467bn between Tuesday and now since it resumed after the Easter holidays.

The bearish trend experienced in the market can be attributed to the increase in the capital base of banks in the country. This move has been applauded by capital market stakeholders, who have said it would boost the market.

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At the close of Thursday’s trade, the All-Share Index declined by 0.43% to 103,736.08, while market capitalisation declined by the same percentage to close at N58.65tn.

The NGX transaction volume rose by 20.42% to 487.73 million units worth N15.63bn from the 8,908 deals.

Sectoral analysis reveals that the banking and industrial goods indexes declined by 2.67% and 0.09%, respectively, while the insurance and consumer goods indexes advanced by 0.43% and 0.46%, respectively. The Oil/Gas sector remained flat. The total number of gainers was 23, while 25 stocks lost.

Top Gainers: Morison Industries Plc, SCOA, and International Energy Insurance gained 9.84%, 9.77%, and 9.72%, respectively, to close at N2.12, N2.36, and N1.58 per share.

Top Losers: C&I Leasing, whose stocks depreciated by 9.79% to close at N3.50 per share.

Zenith Bank, Guaranty Trust Holding Company Plc, and United Bank for Africa were the major drivers of the volume and value of traded equities.

Zenith Bank led in both volume and value, with 161.68 million units traded, amounting to N7.03 billion across 527 deals.

In its banking sector update on the recapitalization, Meristem Research projected that of the three options that the Central Bank of Nigeria gave the banks to recapitalise in 24 months, most lenders would explore rights issues.

“Nigerian banks are expected to raise NGN3.57trn in fresh capital within the specified timeframe. As it stands, notable players, including FBN Holdings, Fidelity Bank, Wema Bank and Access Holdings have signalled their intentions to raise capital through rights issues and private placements. In response to the CBN’s policy, we anticipate a surge in capital market activities.

“Going forward, more banks are likely to join the fray, seeking to bolster their capital reserves through private placements, rights issues, and public offerings. We expect most banks to explore the right issues and other capital-raising activities. Furthermore, there is a growing anticipation of potential bank consolidations, particularly targeted at banks unable to meet the regulatory requirements.

“Given the relatively low valuation of Nigerian banks compared to their regional peers, we expect increased foreign investment and capital flow from international investors, which is positive for the external reserves and increased activities and participation in the Nigerian capital market,” the report partly read.

The Nigerian Stock Exchange finished Wednesday negatively, leading market capitalisation down. 

The NGX All-Share Index (ASI) declined 336.82 points, representing a 0.32% decline, to close at 104,181.32 points. Also, market capitalisation declined by N191 billion to close at N58.905 trillion.

Price depreciation in large and medium-capitalisation stocks, such as FBN Holdings (FBNH), Access Holdings, Stanbic IBTC Holdings, NEM Insurance, and Guaranty Trust Holding Company (GTCO), were said to be the primary cause of the downturn.