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Airtel, Presco, others cause market’s N860bn loss as sell-side interest increases

As sell-side interest increases on the Nigerian Exchange Limited (NGX), the market furthered its losing streak on Thursday by 3.23percent or N860billion. The record negative close was caused among others by stocks like Airtel Africa Plc, Presco Plc and Okomu Oil Palm Plc.

Despite new listing on the Bourse, the market sentiment has remained negative lately as investors rotate out of stocks into fixed-income instruments following rate hike by the Monetary Policy Committee (MPC).

Airtel Africa led the laggards after its share price moved down from preceding day high of
N2000 to N1800, losing N200 or N10 percent. It was followed by Presco which dropped from a high N142.60 to N128.35, losing N14.25 or 9.99 percent, and Okomu Oil Palm which also decreased from N188.30 to N169.50, shedding N18.80 or 9.98percent.

At the close of trading session on Thursday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) depreciated further by 3.23percent from preceding trading day’s 48,836.70 points to
47,260.89 points.

Read also: Naira records marginal depreciation at official market

The equities market capitalisation decreased from N26.600trillion to N25.741trillion. Also, the stock market’s positive return year-to-date (YtD) dropped further to 10.64percent.

In 4,371 deals, investors exchanged 140,670,760 shares valued at N2.516billion. GTCO, Sterling Bank, Zenith Bank, Transcorp and Geregu were top-5 traded stocks on the Nigerian Exchange Limited.

In their recent note to investors, FBNQuest Capital Research said a key factor behind the apathy towards equities “is the effect of monetary tightening by the central bank which has resulted in elevated yields on fixed income securities.”

“Looking ahead, the MPC’s further rate increase of 150 basis points (bps) to 15.5percent, which was implemented last week, is anticipated to have a negative impact on equity market performance and trigger a rotation out of stocks into fixed income instruments,” the FBNQuest Capital analysts added.

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