Nigeria’s equity market has seen significant sell pressure since the beginning of this month (February), no thanks to some medium-to-large cap stocks that have continued to push the market further into the red zone.
Out of the past ten (10) trading days into the month of February, the market only recorded one (1) positive close while the remaining nine (9) trading days were negatives.
Disappointingly, as at Friday February 12, investors have lost about N1.032trillion in stocks this month, thereby almost erasing the gains recorded in the previous month (January).
Banking stocks investors are counting losses are Access Bank (-3.6percent), ETI (-8.3percent), FCMB (-6.9percent), Fidelity (-4.8percent), GTBank (-6.2percent), Sterling Bank (-11.8percent), UBA (-5.2percent), Union Bank (-3.7percent), and Wema Bank (-4.3percent). Their negative return year-to-date (ytd) implies they contributed to the market’s new low.
The Nigerian stock market has been largely affected by the continued profit taking on gains made earlier in the year. This is in addition to the negative reactions to the positive reversal of yields on short dated instruments in the Fixed Income market.
Market watchers believe that the market will remain pressured in the near term in the absence of major positive catalyst capable of improving investors’ confidence.
Though, recent dip in prices of major large cap stocks creates buy opportunities for investors.
In the trading week ended February 12, stock market decreased by 3.04percent; this month it has decreased by 4.65percent, while the year-to-date (ytd) positive return stood at a new low of +0.42 percent.
Read Also: Investors have lost over N800bn in stocks this February
For the industrial good stocks, the major laggards this year are Berger Paints (-1.4percent), CAP (-10percent), BUA Cement (-5.2percent), Cutix (-0.9percent), and Dangote Cement (-10.2percent).
Only Cadbury (-5.6percent) and Nestle (-3.7percent) are consumer goods stocks investors are counting losses this year; while in the Oil & Gas sector MRS (-2.5percent) and Oando (-23percent) failed to impress this year. Other laggards in the agriculture and conglomerate are FTN Cocoa (-22.7percent), Presco (-0.6percent), and John Holt (-2percent).
No doubt with this development, investors in most of these stocks may be pondering their next decision after they were caught in the web of the huge loss.
Unlike other stocks in Insurance sector where investors have made money this year, AIICO and Custodian Investment have failed with negative return of -4.4percent and -1.7percent respectively. Neimeth (-10.3percent) is the only major laggard in healthcare sector, while in the ICT sector, Courteville (-4.8percent) has failed to impress its buyers.
The market opened February with benchmark index at 42,412.66 points and market capitalisation of N22.187 trillion, but as at Friday February 12 those indicators stood lower at 40,439.85 points and N21.155trillion respectively. The value of listed stocks have decreased by N1.032trillion since this month.
Other stocks that contributed to the over N1trillion lost so far this year are: ABC Transport (-7.9percent), Caverton (-8.3percent), C& I Leasing (-1.3percent), DAAR Communications (-16.7percent), Learn Africa (-3percent), NAHCO (-4.3percent), and Red Star (-1.7percent).
