• Friday, March 29, 2024
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Nigeria’s stocks shed over N270bn

Nigeria’s stocks gain N1.08trn in January

Nigeria’s equities trading session on Tuesday November 17 was largely dominated by the bears as profit taking actions continued across board.

The record negative close which put the stock market at a new low may continue in next virtual trading session despite pockets of bargain hunting in few counters.

Top on the list of stocks offered for sale are: Nestle Nigeria Plc, Dangote Cement Plc, Nigerian Breweries Plc, Cadbury Nigeria Plc and International Breweries Plc.

The All Share Index (ASI) –the benchmark performance indicator of the Nigerian Stock Exchange (NSE) –decreased by -1.53 percent to 34,242.83 points on Tuesday November 17 as against preceding trading day high 34,774.08 points. The market’s positive return year-to-date (YtD) stood lower at +27.57 percent.

The value of listed stocks (market capitalisation) decreased by N278billion to N17.892trillion, from a record high of N18.170trillion on Monday.

Nestle Nigeria Plc dipped most from N1450 to N1400, losing N50 or 3.45percent. Dangote Cement Plc followed after its share price moved from N200 to N187.1, down by N12.9 or 6.45 percent.

Nigerian Breweries Plc also decreased from N58 to N54, losing N4 or 6.90percent. Cadbury Nigeria Plc decreased from N10.15 to N9.15, down by N1 or 9.85 percent while International Breweries Plc dropped from a high of N7 to N6.54, sheddding 46kobo or 6.57percent.

In 8,712 deals, investors exchanged 9,360,014,746 shares valued at N12.02billion. UACN Property Development Company Plc, Jaiz Bank Plc, Transcorp Plc, FBN Holdings Plc and UBA Plc were actively traded stocks.

Before now, the domestic bourse saw significant boost, driven largely by the influx of liquidity from the fixed income (FI) market due to unattractive/low yields.

“Nigerian investors have put more money into equities in recent months, switching from risk-free assets (FGN securities) to risky assets (equities). In an era of low Naira interest rates, renewed risk taking comes after a long period, from 2010 to 2019, when the yield of Nigerian T-bills exceeded inflation by 2.57 percentage points, on average.

“Investing used to be straightforward and now it has become complex. Of course, the size of these returns depends on your base currency, and the way you invest depends on how you think exchange rates will move.

“The Naira began the year at N364.70/$1 in the NAFEX market but has since weakened to N385.61/$1. But liquidity in that market has declined this year and the Naira has moved to N470/$1 in the parallel market,” said Lagos-based Coronation research analysts in their recent note to investors.

“Foreign investors look at the performance of the NSE-ASI completely differently from local investors.The equity market does not look overvalued, in our view. Some of the major bank stocks trade at close to their average long-term price-to-book ratios at this point, suggesting that they were undervalued earlier in the year, but are fairly valued now. For industrial stocks it is important to remember that the economy is likely to resume growth in the second quarter of next year. The search for value does not end here,” Coronation research analysts added.