Profit taking in Tier-1 banks stocks as well as declines in Dangote Cement and Nestle, saw a total of N168 billion shaved off from the market capitalisation of the Nigerian Stock Exchange (NSE).
The domestic bourse had seen a whopping gain of N802 billion in the previous week but following several mixed Q1:2020 earnings releases and the increasing number of COVID-19 cases in Nigeria, investors’ sentiment turned negative.
Furthermore, the Central Bank of Nigeria (CBN) at the weekend, debited N1.4 trillion from commercial banks in Nigeria for failing to meet Cash Reserve Requirement (CRR) targets. The cash reserve requirement is the minimum amount banks are expected to retain with the CBN from customer deposits.
From the list of debits suffered by banks, Zenith Bank ranked the highest with about N355.9 billion while FBN Holdings and UBA came second and third with N208 billion and N204 billion respectively
Consequently, the All Share Index (ASI) declined by 1.4 per cent week-on-week (w/w) to settle at 22,921.59 points, market capitalisation lost N168 billion to close at N11.777 trillion while year-to-date (ytd) loss increased to -16 per cent.
Reacting to the weekly performance of the market, analysts noted that they expect anticipate a mixed performance even as the market resumes trading today. Cordros Capital, an investment firm believes that risks remain on the horizon following the increasing number of COVID-19 cases in Nigeria.
“As economic fortunes remain wary, we continue to advise investors to trade cautiously and seek only fundamentally justified stocks”, they said.
For their part, Analysts at Afrinvest, said, “In the coming week, we anticipate a mixed performance as investors react to corporate earnings releases and CBN’s N1.4 trillion CRR debit of commercial banks”.
