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Equity investors lose over N300bn in four days

Foreign investors’ NGX trade up 437% in four months

Another 0.51percent decline witnessed this Thursday on the Nigerian Stock Exchange (NSE) contributed to a record N330billion lost within four trading days into this week.

The four consecutive days of losses on the Bourse signals gradual reappearance of the bears, despite market watchers expectation of bargain hunting activities.

This month alone, the market has decreased by 1.48 percent.

The market had opened this week with benchmark index and capitalisation at 42,412.66 points and N22.187 trillion respectively, but they stood lower at 41,785.80 points and
N21.858trillion at the close of trading session on Thursday.

Year-to-date (YtD), the market’s positive return has decreased to +3.76 percent.

The record dip on Thursday was fuelled by most capitalised stock, Dangote Cement. The cement maker led the laggards after its share price moved from N236 to N230, down N6 or 2.54percent.

Julius Berger followed after declining from N21 to N19.7, losing N1.3 or 6.19 percent, while Northern Nigeria Flour Mill made the top laggards list after its price dipped from N8.75 to N7.88, shedding 87kobo or 9.94percent.

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In 4,753 deals on Thursday, investors exchanged 629,410,194 units valued at N7.980billion. FBN Holdings, GTBank, Union Bank, FCMB and Transcorp were actively traded stocks.

United Capital research analysts believe that nervousness is beginning to trickle into the investment community, adding that investors are beginning to question the sustainability of the 10-month long bullish run.

“Truly, the warning signs of a possible end to the bullish run have continued to develop as yields in the Fixed income market (which has been the primary driver of the current rally) have continued to reverse higher.

“In addition, while the Monetary Policy Committee of the CBN maintained status quo on its policy instruments in its last meeting, the CBN has signaled a possible move towards tightening via aggressive OMO mop ups and upward revision of rates at primary auctions”, United Capital analysts further noted in their recent note to investors.

However, they maintain an optimistic view for the equities market in first quarter (Q1) 2021.

“We think the recent declines in the equities market is a necessary breather, needed to propel the market higher ahead of the earnings season. More importantly, we examined the market technically to provide guidance on short term trends.
“We remain firmly behind our top buy recommendations and suggest investors take advantage of the recent dips to pick up stocks with a bias on high dividend and value stocks. We retain particular interest in Consumer goods and Banking stocks considering the presence of high dividend yield stocks and also the fact that they remain undervalued relative to the broad market”, the analysts added.