Foreign Investors’ Reluctance Costs Nigerian Equities Market N606billion

Foreign investors hesitation cost Nigerian Equities Market a whooping N606 billion over the past six trading following the decision of the United Kingdom, UK’s decision to withdraw from European Union, EU.

Nigerian equities traded in the red in five of the last six trading sessions as the excitements that sprung following the change by the Central Bank of Nigeria, CBN, from fixed forex policy to market-driven, ‘free’ currency faded on the heels of UK’s decision to exit the EU.

Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE), which had opened penultimate Friday at a high of N10.671 trillion, closed this weekend at N10.065 trillion, representing a loss of N606 billion.

In the five-day trading session last week, equities recorded a net loss of N462 billion, trading in four negative trading sessions against one recovery. Market capitalization had opened last week at N10.527 trillion.

The All Share Index (ASI), which had peaked at 31,071.25 points, depreciated to 29,305.40 points, indicating average six-day loss of 5.68 per cent. The ASI, Nigeria’s sovereign equities index, dropped by 4.39 per cent last week. It had opened at 30,649.66 points.

Market analysts attributed the decline in recent trading sessions to the spillovers from the UK’s EU exit referendum, popularly known as Brexit, month-end rebalancing and gap between the forex change and flow of portfolio investments.

Total turnover last week slowed down to 1.47 billion shares worth N17.06 billion in 21,246 deals as a total of 2.39 billion shares valued at N26.38 billion traded in 28,072 deals two weeks ago.

The financial services industry led the activity chart with 1.17 billion shares valued at N10.24 billion in 12,697 deals; contributing 79.6 per cent and 60.0 per cent of the total equity turnover volume and value respectively. The three most active stocks were Guaranty Trust Bank Plc, FBN Holdings Plc and Transnational Corporation of Nigeria Plc, which altogether accounted for 523.549 million shares worth N6.539 billion in 5,223 deals, representing 35.65 per cent and 38.32 per cent of the total equity turnover volume and value respectively.

There were 22 gainers and 52 losers last week as against 40 gainers and 32 losers recorded in the previous week. A total of 106 equities remained unchanged last week compared with 108 equities recorded in the previous week. Julius Berger Nigeria led the gainers with a gain of 15.75 per cent to close at N50.93. Conoil followed with a gain of 15.68 per cent to close at N25.45 while Union Dicon Salt rose by 15.67 per cent to close at N17.35. On the negative side, Smart Products Nigeria recorded the highest percentage loss of 25.49 per cent to close at 76 kobo. Honeywell Flour Mills dropped by 22.60 per cent to close at N1.61 while Champion Breweries declined by 14.86 per cent to close at N4.24 per share.