Stock market loses over N250bn in five days

The Nigeria stock market lost N258billion in a five-day trading week after the nation’s presidential and national assembly elections.

This negative outcome at the stock market comes on the heels of most analysts’ positive outlook for the economy over the next four years as President Buhari’s victory signals policy stability.

The Nigerian Stock Exchange (NSE) All Share Index decreased by 2.12percent in the review week ended Friday March 1, 2019 to 31,827.24 points; this is against a high of 32,515.52 points as at week ended February 22. The sell-off recorded in the review week impacted on the market’s returns year-to-date (YtD) which stood lower at +1.26percent.

Also, week-on-week (wow) the value of listed stocks decreased from N12.126trillion to N11.868trillion. The NSE 30 Index lost 3.12percent week-on-week; NSE Banking Index (-5.88percent); NSE Consumer Goods (-2.91percent); NSE Oil & Gas Index (-1.33percent); while NSE Industrial Goods was up by 0.93percent WoW.

“Given the reaction of investors to the election results, we highlight the possibility of negative sentiment trickling down into the market. That said, we expect bargain hunting to drive positive trading as investors take up undervalued stock leading to a mixed session at week start”, said research analysts at Vetiva Capital in their March 1, 2019 note.

The volume of stocks traded increased to 1.750billion units in the review trading week, up by 18.43percent, from 1.478billion units recorded the preceding trading week; while the value  of stocks traded increased to N19.68billion, from N17.64billion representing 11.53percent increase.

“We expect the yield on government instruments to moderate sharply in the short to medium term while sentiment for equities would improve as investors revert to fundamental drivers of stock market performance rather than political uncertainties”, research analysts at United Capital said in their March 1, 2019 note to investors.

 

Iheanyi Nwachukwu