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Coronavirus, political instability sustain sell-off at NSE

Sell pressure continued at the Nigerian Stock Exchange (NSE), amid negative sentiments fuelled by the rise in Coronavirus pandemic, exacerbated by the political crisis that has engulfed Nigeria’s ruling All Progressives Congress (APC), and wobbling economic data.

Although the NSE All-share index and market capitalisation appreciated marginally by 0.01 per cent to close the week at 24,829.02 and N12.952 trillion, respectively, market indicators plunged successively in four out of five trading days last week.

More so, all other indices finished lower with the exception of NSE-Main Board, NSE MERI Value, and NSE Lotus II Indices, which appreciated by 0.63 per cent, 0.41 per cent, and 0.26 per cent correspondingly, while NSE ASeM and NSE Consumer Goods closed flat.

A look at the market performance last week showed that losses suffered by most blue-chip stocks, especially Neimeth Pharmaceuticals, and Cutix, caused the local bourse to extend losing streak during Monday transactions, causing the market capitalisation to slip further by N38 billion.

The All-Share Index (ASI) fell by 72.83 absolute points or 0.29 per cent to close at 24,753.92 points. Similarly, the market capitalisation of listed equities shed N38 billion to close at N12.913 trillion.

Similarly, sell-offs in high cap stocks, transactions at the NSE continued southward on Tuesday, causing the ASI to contract by 3.86 absolute points, a 0.02 per cent fall to close at 24,750.06 points. Similarly, the overall market capitalisation shed N2 billion to close at N12.911 trillion.

The downturn was impacted by losses recorded in medium and large value stocks, including Dangote Sugar Refinery, Nigerian Breweries, PZ Cussons Nigeria, Ecobank Transnational Incorporated (ETI) and Lafarge Africa

The losing streak was extended on Wednesday as sell-offs in 22 stocks dragged the index further by 0.38 per cent.

At the close of trading, the ASI fell by 95.01 absolute points or 0.38 per cent to close at 24,655.05 points, while the overall market capitalisation shed N49 billion to close at N12.862 trillion.

The downturn was occasioned by losses recorded in large and medium value stocks, including Seplat Petroleum Development Company, Guinness Nigeria, Nigerian Breweries, GlaxoSmithKline Consumer Nigeria, and PZ Cussons Nigeria

The weak sentiments persisted on Thursday, as more blue-chip stocks suffered a price fall, causing investors to lose N68 billion in four trading days.

Specifically, the market capitalisation, which opened at N12.913 trillion on Monday, dropped to N12.845 trillion on Thursday, shedding N68 billion, while the ASI slipped by 128.68 or 0.5 per cent from 24,753.92 points to 24,625.24.

Thursday’s downturn was impacted by losses recorded in large and medium value stocks, amongst which were; MTN Nigeria Communications (MTNN), Zenith Bank, Linkage Assurance, FBN Holdings (FBNH), and Japaul Oil and Maritime Services.

However, at the close of transactions on Friday, the All-Share index advanced by 0.83 per cent. 14 stocks posted gains while 13 stocks declined.

The persistent fall in market activity and the continued negative trend reflect cautious trading among investors, as they factored in the expected Q2 earnings reports, which are likely to be disappointing as a result of the virus-induced economic downturn and lockdown.

 

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