Investors lose N120bn as MTNN, BUA Cement, others spur stock market’s new lows

Nigeria’s equities market opened the new week on a negative note (-0.90 percent) supporting our earlier view that sell pressure may outweigh bargains as risks to sustained rally remain.

Investors lost N120billion on Monday June 15, 2020 fueled by profit taking in large cap stocks like MTNN Nigeria, BUA Cement, Zenith Bank, GTBank and ETI.

Before now, the performance of the equity market was largely driven by bullish sentiment especially on mid-to-large cap stocks.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation both depreciated from 25,182.67 points and N13.137 trillion to 24,954.25 points and N13.017trillion.

The market’s year-to-date (ytd) negative return increased to -7.03 percent; while this month the market has decreased by 1.23percent.

In 4,808 deals, equity investors exchanged 237,652,864 units valued at N1.609billion.

MTNN Plc dipped most after its share price moved from N118 to N116, losing N2 or 1.69percent.

BUA Cement decreased from N41.5 to N40.75, shedding 75kobo or 1.81percent. Zenith Bank share price dropped from N16.65 to N16.2, losing 45kobo or 2.70percent.

GTBank share price was also down from N24 to N23.6, losing 40kobo or 1.67percent; while that of ETI decreased from N5.45 to N5.05, shedding 40kobo or 7.34percent.

“Our expectation this week is premised on the increased possibility of profit taking on counters that have gained thus far.

“While we do not rule out bargain hunting on stocks that have remained flat, we expect the overriding sentiment in the market this week to be bearish”, said Meristem research analysts.

In the absence of corporate actions or any significant catalyst that could spur the market to a positive close, Meristem research analysts expect the local bourse to reverse the gains recorded last week.

Also, Access Bank economic intelligent group expects that investors will engage in aggressive profit taking “due to saturated market which is currently on the ‘over-bought’ region.”

“Looking ahead, we expect the market to remain volatile, as investors lock funds in cheap and fundamentally sound stocks, while taking profit on some stocks that gained last week”, said Lagos-based United Capital research analysts.

“With speculations around the possible impact of the second wave of the coronavirus hitting countries around the world, as well as the declines in prices of crude oil due to weak demand, we expect some level of jittery and negative reaction at the start of this week, barring any positive event that is capable of uplifting sentiment”, Vetiva research analysts said.

“In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions”, said analysts at Lagos-based Cordros.

They continued to advise investors to trade cautiously this week “and seek trading opportunities in only fundamentally justified stocks.”

Afrinvest research analysts said in the June 15 note that they expect last week’s bullish streak to be sustained this week “as investors position in attractive stocks and sentiment improves due to a rebound in global oil prices.”