The Nigerian Exchange Limited’s market capitalization fell for the first time in the new year. The market’s eight-day surge came to an end on Wednesday, when the market value fell by around N638 billion to settle at N44.885 trillion. This comes only one day after the market value surpassed N45 trillion.
Although the All-Share Index, the exchange’s benchmark, maintained over 80,000 points, it fell 1,167.46 points, or 1.40 percent, to settle at 82,024.38 on Wednesday.
Banking equities were hit hard by the devaluation, with the exception of Jaiz Bank, which defied the trend and rose 5.40 percent to N2.93 and Stanbic IBTC Holdings, which finished flat.
Meanwhile, a day after the lenders passed the N1 trillion barrier, the market capitalization of Access Holdings Plc and First Bank of Nigeria Holdings fell below N1 trillion. They closed the market with respective capitalisations of N989bn and N926bn.
The drop in the stock market comes a day after the Economic and Financial Crimes Commission questioned certain bank Managing Directors about a scam discovered at the Ministry of Humanitarian Affairs and Poverty Alleviation.
The stocks of indigenous conglomerate, Transnational Corporation Plc, AccessCorp, United Bank for Africa, Jaiz Bank, and Zenith Bank were the primary drivers of the day’s market. Market Breadth which is the measure of investors’ sentiment was negative resulting in 13 gainers and 61 losers.
The gainers were led primarily by stocks of Cadbury Plc which gained 9.92 per cent to N19.95 per unit. On Tuesday, the consumer goods company revealed plans to seek shareholders’ approval to convert a N7.036bn loan from its parent company, Cadbury Schweppes Overseas Limited, to equity.
In an explanatory statement on the proposed debt-to-equity conversion filed with the NGX, the company revealed that between February 2021 and September 2023, Cadbury Schweppes Overseas, loaned $23m to Cadbury Nigeria to help settle outstanding third-party loans which the company had obtained to fund its raw material imports and other input costs.
However, due to the foreign exchange challenges in the country, it was unable to meet its debt obligations, which led the board to propose the debt-to-equity conversion plan.
Other gainers include VeritasKap which gained 9.76 per cent to close at N0.45, Linkage Assurance gained 8.70 per cent to close at N1.50, Transcorp Hotel gained 7.24 per cent to close at N100 per unit and Prestige Assurance gained six per cent to close at N0.53 per unit.
The losers’ chart was led by Chams Holdings, Cornerstone Insurance, FTN Cocoa, May & Baker, Caverton and Consolidated Hallmark Holding Plc, which lost 10 per cent each to close at N2.16, N1.80, N1.98, N5.49, N2.07 and N1.35 per unit, respectively.
The volume and value drivers of the day’s market trend were led by stocks of Transcorp, AccessCorp and Guaranty Trust Holding Company Plc.
Despite the downturn in the market, the transaction volume for the day rose to 1,641.28 million, from the previous day’s volume of 1,409.85 million units of shares valued at N25.37bn from 20,223 deals executed. The number of stocks traded on Wednesday stood at 123.
