Bearish trend threatens stock market recovery

The three week continuous downturn at the Nigerian Stock Exchange threatens the much anticipated rebound and year end market recovery.

The exchange’s All-Share Index and market capitalisation, the two parameters for measuring market performance, bounced back yesterday, but could only gain a poor N14 million, against the billions it usually recorded when it rebounds.

The market capitalisation of the 198 First-Tier equities closed a little higher on Thursday, at N5,002,423 trillion after opening the day at N5,002,408 trillion, reflecting a fall of over N14.85 million. The exchange’s All-Share Index was also up by 0.07 units to close at 21,204.58 basis points, overturning the 21,204.51 points recorded on Wednesday.

Attempted recovery

The indices, last week Friday, also made some recovery by gaining 1.50 per cent, but the bearish trend at the market weakened the rebound, as share off -loading by investors sent the market downward with losses outweighing the gains. In the last three weeks of continuous fall at the equity market, over N314 billion has been lost.

However, Mike Itegboje, Chief Executive Officer, TRW Stockbrokers Limited, is optimistic the market will “pick up very soon especially after the Nigerian Stock Exchange successfully hosts its counterparts in the African continent.” He said the 13th Annual African Securities Exchange Association conference, which is expected to hold in Abuja next month, will benefit all market operators.

“The exhibition of financial products and services by financial institutions as well as listed companies and their products will further attract and boost the confidence of local and foreign investors in the Nigerian market,” Mr. Itegboje added.

Few stocks appreciate

About 40 stocks shed prices while 26 of them appreciated. Over 470.004 million volumes of stocks, valued at N3.649 billion, were recorded in 5,660 deals.

Unilever Nigeria Plc and UAC Nigeria Plc topped the price gainers’ table with an increase of 83 kobo and 48 kobo on their initial prices of N19.17 and N40.50 per share, respectively. Nigerian Aviation Handling Company and Guaranty Trust Bank followed in the chart with an increase of 38 kobo and 30 kobo respectively, to close at N7.99 and N16.45 per share.

On the other hand, Nigerian Breweries and PZ Cussons Nigeria led the price losers’ chart with a loss of N1.41 and N1.20 respectively, from their opening prices of N55.12 and N24.03 per share. Lafarge Wapco Cement Plc and Cement Company of Northern Nigeria Plc followed with 80 kobo and 69 kobo losses respectively, to close at N28.83 and N13.21 per share.

Access Bank, United Bank for Africa, and Dunlop Nigeria were the most traded stocks yesterday, followed by First Bank of Nigeria and Intercontinental Bank.

Active sectors

The banking subsector led the most active subsectors’ chart with 329.394 million volumes of shares, valued at over N2.513 billion. Volume in the subsector was driven by trading in shares of Access Bank, United Bank for Africa, and First Bank of Nigeria.

Trading activities in the Insurance subsector followed, with 47.587 million shares valued at N54.169 million. Volume in the Insurance subsector was boosted by deals in shares of Standard Alliance Insurance Plc, Aiico Insurance Plc, and Custodian and Allied Insurance Plc.

The Automobile and Tyre subsector was third in the activity chart with 18.402 million shares worth N9.257 million. Volume in the subsector was largely driven by trading in the shares of Dunlop Nigeria, and R T Briscoe.

Global market

Meanwhile, market indices recorded in other Stock Exchanges across the globe, at the close of Thursday’s transactions, were also positive.

The Australian Securities Exchange’ ASX 50 gained 0.13 per cent while the Belgium Bel 20 Index, and the Canadian CDNX Index went up by 0.16 per cent and 0.11 per cent, respectively.

In Europe, the Germany TECDAX gained 0.72 per cent while the Europe DJ Stoxx Index, and the France SBF 80 Index gained, respectively, 0.64 per cent and 0.26 per cent. The Netherland AEX Index also increased by 0.35 per cent.