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Nigeria: Stock Market Declines 2.5% On Profit Taking

The stock market declined by 2.5 per cent last week following profit taking after weeks of sustained growth. The market, which spiked by 12.9 per cent the previous week, closed lower last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) shedding 2.5 per cent to be at 34,136.82. The market capitalisation closed lower at N17.838 trillion.

Despite the decline, analysts at Cordros Research said in the short to medium term, they still see scope for expansion in valuation multiples as the depressed yield environment remains compelling for yield-seeking investors to rebalance their portfolio towards equities.

“In the week ahead((this week), we expect a mixed market performance due to continued profit-taking activities and positioning by early birds in dividend-paying stocks ahead of full year (FY) 2020 dividend declarations. We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” the analysts said.

Meanwhile, investors traded 11.4 billion shares worth N35.892 billion in 39,265 deals compared with 4.509 billion shares valued at N58.733 billion that exchanged hands in 47,140 deals the previous week. The Construction/Real Estate industry led the activity chart with 8.529 billion shares valued at N6.055 billion traded in 438 deals, thus contributing 74.8 per cent and 16.8 per cent to the total equity turnover volume and value respectively.

The Financial Services Industry followed with 1.991 billion shares worth N19.933 billion in 21,725 deals, just as the Conglomerates Industry occupied the third position with a turnover of 423.702 million shares worth N526.698 million in 1,962 deals. Trading in the top three equities namely UAC- Property Development Company Plc, Transnational Corporation of Nigeria Plc and Jaiz Bank Plc accounted for 9.259 billion shares worth N6.639 billion in 1,958 deals.

The price movement, showed that 55 equities depreciated in price, higher than 12 equities in the previous week, while 21 equities appreciated in price during the week, lower than 69 equities in the previous week.

Coronation Insurance Plc led the price losers with 21.1 per cent, trailed by Oando Plc with 19.7 per cent. Japaul shed 18.1 per cent, just as Transcorp Plc went down by 13.0 per cent. FBN Holdings Plc and Sterling Bank Plc depreciated by 12.1 per cent and 11.9 per cent respectively.

Other top price losers: Nigerian Aviation Handling Company Plc (11.5 per cent); Fidelity Bank Plc, FCMB Group Plc (11.4 per cent apiece); and Union Bank of Nigeria Plc (11.2 per cent).

On other hand, BOC Gases Plc led the price gainers with 39.8 per cent, trailed by Tripple Gee & Company Plc with 19.5 per cent. NEM Insurance Plc chalked up 17.2 per cent. AIICO Insurance Plc gained 12.2 per cent, just as Ikeja Hotel Plc and Linkage Assurance Plc went up by 10 per cent apiece.

Other top price losers included: Conoil Plc (9.4 per cent); UPDC Real Estate Investment Trust (9.2 per cent), Cornerstone Insurance Plc (6.9 per cent) and Champion Breweries Plc (6.0 per cent).