Investors lose N11bn as stock market opens week on negative note

Nigeria’s stock investors booked about N11billion loss on Monday January 24 as the market declined by 0.06percent at the close of trading session. The market’s positive return year-to-date (YtD) decreased to 7.52percent.
The southward movement was caused by increased sell pressure in mostly insurance stocks like Regency Assurance Plc (-9.52percent), NEM Insurance Plc (-5.41 percent) and Sovereign Trust Insurance (-4.17 percent). Other laggards are FTN Cocoa Processors Plc (-7.69 percent) and Cutix Plc (-4percent).

In their recent outlook for 2022, analysts at Lagos-based United Capital said: “we struggle to see significant improvement in investor appetite towards equity instruments in 2022.”

According to the analysts, they expect Foreign Portfolio Investments (FPIs) in equities to remain downbeat “given the unrelenting FX debacle, upcoming elections, and volatile macroeconomic environment.”

Read also: Nigeria’s stocks gain over N800bn in week ended Jan.21

“Given the expected higher yield environment, we anticipate that this will trigger asset rotation from PFAs, which could depress equity market performance. Thus, we expect to see sell pressures from domestic investors (particularly institutional investors),” United Capital analysts said. Despite their anticipated sell pressures during the year, they do not foresee a rout but rather mild bearish sentiments in 2022.

As at close of trading on Monday, the market’s benchmark performance indicators –the Nigerian Exchange Limited (NGX) All-Share Index (ASI) decreased from 45,957.35 points to 45,928.27 points while the value of listed stocks on the Nigerian Exchange Limited decreased from N24.760trillion to N24.749trillion.

Chams Plc, UBA Plc, Courteville Business Solutions Plc, Sterling Bank Plc and Access Bank Plc were most traded stocks on Monday. In 4,447 deals, investors exchanged 278,605,710 units valued at N2.887billion.

“Last week, the NGX market was lifted by trades in names like SEPLAT, TRANSCORP and DANGCEM, while being dragged by sell pressure seen mostly in the insurance sector. We expect the latter to persist into this week amid persistent profit taking activities,” according to Vetiva Research analysts in their January 24 note.