• Thursday, March 28, 2024
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Investors in Nigeria’s equities lost N1.4trn in February

Macroeconomic and Markets Outlook: Here’re factors Comercio Partners says will further shape markets

Investors in Nigeria’s stock market are caught in the web of huge capital loss cumulatively valued at about N1.36trillion.

After January’s rally which placed the stock market of Africa’s largest economy as the continent’s best, investors became worse off in February with a record dip of -6.16percent.

Yields uptick in the fixed income (FI) environment contributed to the record bearish outing witnessed in the equities market in February. The month of February which opened with total value of Nigeria’s listed equities at N22.186trillion and the market’s benchmark performance indicator (All Share Index) at 42,412.66points closed at N20.823trillion and 39,799.89 points respectively.

Despite the record dip in February, stocks that topped other underperformers in the market are: ABC Transport (-10.5percent), Africa Prudential (-8percent), Beta Glass (-9.7percent), BUA Cement (-6.9percent), Cadbury (-5.6percent), Caverton (-7.3percent), Conoil (-9.4percent), Cutix (-7percent), DAAR Communication (-16.7percent), Dangote Cement (-10.2percent), Deap Capital (-20percent), and Ecobank Transnational (-13.3percent).

In the absence of positive news capable of reversing this negative trend, the record bearish sentiment will continue in March which is the peak of earnings season. Though, the market’s new low as a result of price crash offers opportunity for bargain hunting for cheap banking and consumer goods stocks with strong fundamentals, particularly those with records of dividend payments year-on-year.

Read Also: Nigeria’s stock market rallies as investors buy Oando, others

Other top laggards are: FCMB (-9 percent), FTN Cocoa (-25.8percent), John Holt (-5.9percent), Nigerian Breweries (-7.1percent), Neimeth (-17.9percent), Oando (-6.8percent), Pharma Deko (-10percent), Stanbic IBTC (-9.2percent), Sterling Bank (-16.2percent), Studio Press (-10.1percent), Sunu Assurance (-26.7percent), UBA (-5.8percent),University Press (-7.8percent) and Wema Bank (-8.7percent).

“Void of any significant positive event capable of lifting investors’ sentiment, the ASI continued on its downward slope amid persistent sell pressure. With the anticipation of some corporate earnings hitting the market in the coming week, we expect the market to trade mixed, with a bit of cherry picking activities in some counters and continued sell pressure driven by the outflow of funds from the equities market to the Fixed Income market”, said analysts at Lagos-based Vetiva Securities.

At the close of trading session on Friday February 26 –the last trading day in the review month –Nigeria’s stock market’s year-to-date (ytd) return furthered into the negative territory to -1.17percent.