Stocks dropped to a 10-month low despite the positive half year results from two of the country’s most profitable banks.
Nigerian Stock Exchange All Share Index dropped for the fifth straight session, down 0.19 percent to close at 36,232 points, its lowest point since October 2017.
The NSE Index has now shed 2,010 points this year losing almost N600 billion in market capitalization since the start of the year. Banks who populated the chart for top performing stocks last year have struggled to lift the market again this year.
Nigeria’s largest listed lender, Guaranty Trust Bank (GTB) released half-year results on 8 August with profit after tax coming at N96 billion which was 14.2 percent higher than the N84 billion reported in the comparable period of 2017.
The bank also proposed an interim dividend of 30 kobo per share with dividend indicated yield of 0.8 percent.
Similarly, Zenith Bank on 6 August released half year interim results showing profit after tax of N82 billion, which was 8.5 percent higher than the comparable profit of N75 billion as of June 2017. The bank had also proposed a dividend of 30 kobo per share resulting in a dividend yield of 1.3 percent. Both financial institutions are known to be the most profitable banks in the country.
However, the release of their interim results has failed to lift the market as concerns over the rising level of political uncertainty in the country overwhelm positive investor sentiments.
Stocks have fallen 5.3 percent so far this year, after climbing 42.3 percent last year.
“The increasing uncertainty in the Nigerian political environment has a huge effect on investment as investors are pulling out,” Christain Orajekwe, a Research Analyst at Cordros Capital, told BusinessDay.
“Also offshore participation in the local market has dropped significantly.”
Topping stocks that declined yesterday was Mobil Plc which dropped 5.56 percent to close at N170 per share. FBN Holdings fell 4.52 percent to N9.50 while Zenith Bank dropped 0.63 percent to close at N23.6.
Other top decliners were Fidelity Bank, Transcorp, Diamond Bank and FCMB, all down more than 4 percent. Nigerian Breweries, the local unit of Dutch brewer Heineken, shed 2.9 percent.
Abdulrauf Bello, investment research analyst at WSTC Financial Services told BusinessDay that the bearish performance of the market is not affected by investors’ earnings but by macro-economic issues.
“They include, political tensions and capital outflow although, political tensions is the major factor that affects the market as investors do not like to be locked-in to equities in a period close to elections as they are unsure of who will win,” Bello said. Second-quarter earnings have been mixed, with most lenders posting declines in loan growth, citing a weak economy, while several consumer goods companies have recorded lower profits.
Newly-listed fertiliser firm Notore reported a wider loss before taxes for the nine-months to June. Its shares have remained flat at N62.50 with low trading activity since listing on NSE last week.
Political developments ahead of an election next year, in which President Muhammadu Buhari is seeking re-election, have also dented investor sentiment, analysts say.
With the political upheaval dominating conversations on the trading floor, the index may continue to be more responsive to political noise than company fundamentals at least until the election next February.
Meanwhile Lasun Yusuf, Deputy Speaker of the House of Representatives, has announced that the National Assembly will reconvene on Tuesday, August 14.
He disclosed that the agenda will primarily be the presidential request for virement of funds for the operations of the Independent National Electoral Commission (INEC) for the 2019 polls.
Yesterday a group of political parties raised alarm over attempts to freeze the bank accounts of Senate President Bukola Saraki.
The parties numbering about 45, also revealed fresh plots to impeach the Senate President. They stated this on Thursday in Abuja when they paid a solidarity visit to the Senate leadership.
Speaking on behalf of the political parties, National Chairman, National Unity Party (NUP), Perry Opara, condemned Tuesday’s siege on the National Assembly by operatives of the Department of State Services (DSS).
According to Opara, Nigeria is gradually turning into a failed state, even as he condemned the use of security agencies to clamp down on the opposition and stifle democracy. He, however, did not list the agency involved.
The National Chairman cited the siege on the residences of the Principal Officers of the National Assembly, Tuesday’s invasion of the Complex and that of the Benue State House of Assembly to buttress his argument.
He said: “We wish to alert Nigerians of a new plot by the same people, whose first shameful attempt to unlawfully overthrow the leadership of the National Assembly failed; an attempt, which brought Nigeria to bad international limelight. We have it on good authority that a fresh plot is being hashed to make another attempt to cripple the parliament in the guise of impeachment, even when they know that there is no constitutional majority to achieve sinister move.”
Responding, Saraki expressed the hope that anti-democratic forces must have learnt their lessons, following the invasion of the National Assembly, assuring that lawmakers will continue to protect the nation’s democracy.
Chairmen of political parties at the visit include: United Democratic Party (UDP), Rebuild Nigeria Party (RNP), People for Democratic Change (PDC), Peoples Party of Nigeria (PPN), Progressives Peoples Party (PPP), Grassroots Development Party of Nigeria (GDPN), Alliance for Democracy (AD), Young Democratic Party (YDP) among others.
Meanwhile the Economic and Financial Crimes Commission (EFCC) confirmed that its operatives raided the Abuja home of former Director General of the State Security Service (SSS), Ita Ekpeyong and arrested him on Thursday.
The Media Officer of the anti- corruption agency, Wilson Uwugaren, who confirmed the development to BusinessDay, however did not give any further details. “Yes it is true that the EFCC raided his house today, that is all I can tell you”, Uwugaren said, in response to BusinessDay inquiry on the matter.
OWEDE AGBAJILEKE & Innocent Odoh, Abuja, Emeka Ucheaga, Cynthia Ikwuetoghu & Oghogho Edosomwan, Lagos
