Equities value falls by N571bn in three days

The market capitalisation of the listed equities on the Nigerian Stock Exchange fell by N571bn or 5.57 per cent between Monday and Wednesday as investors, spooked by uncertainty about economic policies and the global sell-off in equities markets, dumped more shares.

After opening the week at N10.241tn, the market capitalisation fell by N228bn or 2.22 per cent on Monday to N10.013tn.

On Tuesday, it declined by N113bn or 1.13 per cent to N9.900tn before shedding N230bn or 2.32 per cent on Wednesday to close at N9.670tn.

On its part, the NSE All-Share Index fell by 1,740.68 basis points or 5.83 per cent between the start of trading on Monday and the close of Wednesday’s trading activities.

Consequently, the NSE ASI’s year-to-date return slipped further into negative territory at -18.81 per cent, more than the decline recorded in 2014.

The Chief Executive Officer, Enterprise Stockbrokers Limited, Mr. Rotimi Fakayejo, said the decline had more to do with the change in investment outlook from the equities market to the money market.

He said, “If you look at critically, government bond is seeing an increase in yield with coupon rate at 16 per cent. The equity market is so much uncertain. So, money has really been moving from the equities market.”

According to him, high cap stocks have been the worst hit this week, principally Dangote Cement Plc, Nigerian Breweries Plc and Guinness Nigeria Plc, Zenith Bank Plc and Guaranty Trust Bank Plc.

“So, those five stocks have really been worst hit and that has contributed to the drop we are seeing,” he said.

“Looking at other securities, we are not seeing as much significant change.”

On the likelihood of the trend changing this week, he said there was no sign to that effect.

Fakeyejo, however, hinted that the decline in stock prices provided great opportunity for investors.

“I think it is just getting to a level where pockets of investors will begin to come in and take advantage. We have really been seeing activities in some of these stocks that have been dropping,” he said.

He, however, explained that the activities had not been at a level that would help prices stabilise and then rise.

Fakeyejo said the investors were also concerned about the sell-off in the global market with some believing, albeit erroneously, that the sell-off could lead to a crisis similar to that of 2008.

He said, “Based on the trend in the global market, a lot of people are beginning to be stricken with fear; saying it could be a repeat of what happened in 2008/09. But this is very far from that.”

Only six stocks recorded price appreciation on Wednesday, whereas 47 others suffered losses.

PZ Cussons Nigeria Plc led the losers, shedding 9.69 per cent or N2.48 to close at N23.11 per share.

Northern Nigeria Flour Mills fell by 9.66 per cent to N10.47 per share, while FBN Holdings dipped by 7.76 per cent or 44 kobo to close at N5.23 per share.

Transnational Corporation of Nigeria fell by 6.22 per cent to N1.96 per share, while United Capital Plc and Nestle Nigeria Plc shed five per cent each to close at N1.14 and N917.69 per share.

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