Stock investors witnessed a significant downturn on the Nigerian Exchange as the market sustained its bearish trend on Thursday, resulting in a loss of N252 billion in market capitalization.
The market had resumed trading on Tuesday after the Easter holidays, only to witness a total loss of about N467 billion within the short span until Thursday.
The bearish sentiment in the local bourse followed the announcement of an increase in the capital base of banks in Nigeria, a move that had initially been anticipated to boost market activities, according to capital market stakeholders.
Meristem Research, in its banking sector update on the recapitalization, highlighted that Nigerian banks were expected to raise a total of NGN3.57 trillion in fresh capital within a 24-month timeframe. Notable players such as FBN Holdings, Fidelity Bank, Wema Bank, and Access Holdings had indicated their intention to raise capital through rights issues and private placements.
The report also anticipated a surge in capital market activities, with more banks likely to explore rights issues and other capital-raising activities. It further hinted at potential bank consolidations, particularly targeting banks unable to meet regulatory requirements.
Despite the positive outlook outlined in the report, Thursday’s trading session saw the All-Share Index decline by 0.43 per cent to 103,736.08, with the market capitalization also depreciating by the same percentage to N58.65 trillion.
Transaction volume witnessed a notable increase, rising by 20.42 per cent to 487.73 million units valued at N15.63 billion, executed across 8,908 deals.
While the banking and industrial goods sectors recorded declines of 2.67 per cent and 0.09 per cent, respectively, the insurance and consumer goods sectors experienced marginal gains of 0.43 per cent and 0.46 per cent. The Oil/Gas sector remained relatively flat.
Morison Industries Plc, SCOA, and International Energy Insurance led the gainers’ chart with 9.84 per cent, 9.77 per cent, and 9.72 per cent gains, respectively. Conversely, C&I Leasing emerged as the top loser, depreciating by 9.79 per cent.
Zenith Bank, Guaranty Trust Holding Company Plc, and United Bank for Africa were the major drivers of both volume and value traded, with Zenith Bank leading in both categories, trading 161.68 million units valued at N7.03 billion across 527 deals.
