Stocks shed N17bn as market rout continues

Nigeria’s equities market on Monday continued its journey into the negative region as investors cautiously approached the local bourse ahead of the outcome of Monetary Policy Committee (MPC) meeting.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its equities Market Capitalisation depreciated further on Monday March 20 by about 0.09percent from preceding day’s 54,915.39 points and N29.916 trillion respectively to 54,888.48 points and N29.899trillion.

“We expect risk-on sentiments to return to the equities markets as the depressed interest rate environment will continue to favour the local bourse in line with our expectations for Q1-2023,” according to Lagos-based analysts at United Capital Plc.

Stanbic IBTC Holdings Plc led the decliners after its share price dropped from N39.90 to N36.50, losing N3.40 or 8.52percent.

Also, on the top laggards least includes Ikeja Hotel which decreased from N1.26 to N1.14, shedding 12kobo or 9.52percent.

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Multiverse Mining and Exploration also dropped from a high of N3.45 to N3.25, losing 20kobo or 5.80percent.

“We still expect mixed trading in the market this week, as investors cautiously cherry pick stocks in the equity market, while the decision of the MPC will also be keenly anticipated,” said Vetiva research analysts in their March 20 note.

The market’s year-to-date (YtD) return decreased to +7.10percent. Neimeth, UBA, Access Corporation, Transcorp and Zenith Bank were actively traded stocks on Monday. In 3,066 deals, investors exchanged 1,171,806,882 shares valued at N2.876billion.

According to Meristem research analysts, “We anticipate a further rate hike by the Monetary Policy Committee this week. While we do not anticipate a substantial reaction from investors, this is expected to prompt further selloffs. However, we do not rule out bargain-hunting activities on some tickers that have depreciated.

“Overall, we expect the market to close in the negative this week,” they added.

Earlier in their note, Meristem research analysts noted that, “In recent weeks, the Nigerian equities market has been relatively negative, evinced by lower market turnover and a significant number of laggards. Thus, the prevailing negative sentiment is expected to linger this week as investors take profit from tickers that have appreciated, especially in the financial services sector (a probable spill-over effect from the global economy).”