Stock market shed 1.64 per cent in the month of August as the ASI declined to 29,684.84 from 30,180.27 at which it opened for the month, while the capitalisation shed N137 billion for the month.
For the month, market breadth was negative as 19 gainers and 69 losers were recorded, while the prices of 110 companies remain unchanged.
Listed companies last month witnessed profit-taking by especially foreign investors on the heels of indistinct economy policies by the President Muhammadu Buhari’s administration and weak corporate earnings.
Macroeconomic strains, characterised by a weak naira, fall in oil prices, huge energy costs, among others have hit on companies’ earnings and share price decline.
For example, the share price of Unity Bank dropped by nearly 30 per cent from N2 it opened in August to N1.41 it closed while that of Northern Nigeria Flour Mills recorded a decline of nearly 29 per cent to N10.47 from N14.72 it opened for trading at the beginning of August.
Investors had reacted to the sack of erstwhile managing director of Unity Bank Plc, Henry Semeniteri. However, despite impressive corporate earnings in the first six month of 2015, the Unity Bank share price dropped the most among the listed Deposit Money Banks (DBMs) followed by United Bank For Africa Plc that lost 20.6 per cent from N4.17 to N3.31 per share.
On its part, NNFM for the past six years has been grappling with slow sales, impacting negatively on its share price. The Flour milling company for the half year ended June 30, 2015 recorded a net loss of N78 million in June 2015 from N131.98 million recorded in June 2014 while revenue significantly dropped by 89per cent from N3 billion in June 2014 to N357.9 million in June 2015.
E-Tranzact International share price also made the list of top losers in August after dropping by 28.3 per cent from N2.58 to N1.02, followed by R. T. Bricoe, was down by 28.2 per cent from 71 kobo to 51 kobo.
Further losers according to LEADERSHIP include Ikeja Hotel that decline by 23 per cent to N2.84 from N3.69 and Red Star Express that moved from N4.93 to N3.80, representing a decline of 22.9 per cent.
Also, under the Consumer Sub-sector, Cadbury Nigeria and Nestle Nigeria dropping by 18.5 per cent and 1.2 per cent to close at N28.56 and N840 respectively.
On the other side, Forte Oil top the gainers chat with 32.6 per cent or N62 from N190 to N252. Other gainers are Dangote Sugar Refinery with 20.5 per cent, Skye Bank gained 20.1 per cent, Unilever Nigeria 11.1 per cent and Evans Medical with 14.3 per cent price appreciation in August.
Market analysts over the years have advised investors to often think of investing on a long term basis in order to gain price appreciation and possible returns on their investment through dividend or bonus payment.
They are optimistic about share price recovery once the present administration appoints ministries and roll out its economy blueprints.
The capital market this year has been a weaker side following the uncertainty building up to the general elections and severe monetary policies on the side of Central Bank of Nigeria (CBN).
Source : Leadership