• Monday, May 27, 2024
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Stock investors lose N85bn as Dangote Cement spurs erosion of mid-day gains

Stocks

Stock investors at the Nigerian Bourse lost about N85billion on Tuesday March 17, 2020. The market closed in the red zone, fuelled by the impact of the 10percent decline in the most capitalised stock –Dangote Cement.

This negative came on the heels of record mid-day gain of about N150billion when investors were taking positions in some value counters.

The ASI would have closed Tuesday session in the green, if not for Dangote Cement stock. The stock decreased from       N153 to N137.7, losing N15.3 or 10percent, while Nigerian Breweries Plc advanced most from N27.95 to N30, adding N2.05 or 7.33percent. Zenith, GTBank, FBNH, Access and UBA were actively traded stocks on the NSE on Tuesday March 17.

There is renewed fear of Coronavirus (COVID19) following its third case in Lagos, the country’s business capital.

The Nigerian citizen returned into the country on March 13 from United Kingdom, one of the COVID19 high risk countries like Italy and the United States.

Besides the aviation and tourism sectors, COVID19 has also crippled international trade and rocked the capital market, with stock prices and bond plunging. Oil price neared $30 per barrel as recession fears, pump war weighed.

The value of stocks listed on the Nigerian Stock Exchange (NSE) decreased to N11.747trillion as against preceding day high of N11.832trillion.

The NSE All Share Index (ASI) also printed low at 22,543.07 points from a high of 22,705.19 points the preceding day.

In 7,368 deals, investors exchanged 675,910,797 units valued at N8.059billion.

The Nigeria stock market had since joined the global rout with year-to-date (ytd) return printing at a record negative of -16.02percent lately. It lost about N1.8trillion last week.

“Given that there is no improvement in global outlook –depressed oil prices and the coronavirus pandemic –we think there is still a possibility of further declines,” said analysts at Coronation Research.

All over the world, the outbreak of Coronavirus (COVID-19) has drawn the attention of monetary authorities.

Notably, the US Fed tweaked its policy rate lower to zero, while launching a $700billion asset purchase programme. Also, the Bank of England trimmed its policy rate by 50basis points (bps) – its first rate cut since July 2016.

Also, the Central Bank of Nigeria (CBN) at an emergency meeting recently, joined the easing bandwagon as it released six initial policy measures, aimed at reducing the impact of the global pandemic on Nigeria’s economy.

With international communities locked down, factories closed, trade slowing, and investor confidence plummeted during the prolonged fight against COVID19, there is no saving the Nigerian economy from the butterfly effect of the pandemic.

“The impact of the coronavirus outbreak on Nigeria’s economy is likely to be significant, as it is poised to take a toll on critical economic sectors.

“The situation is being made worse by the slide in crude oil prices as a result of a crude price war between Saudi Arabia and Russia”, said Mosope Arubayi’s team of analysts at Lagos-based Vetiva.

 

Iheanyi Nwachukwu