Investors Lose N241.61bn Ahead 2023 Electioneering Kickoff
Investors’ sentiments were again dampened for another week on the floor of the Nigerian Exchange Limited (NGX) following a N241.61 billion loss by investors ahead of the kick-off of electioneering for the 2023 poll in the country.
The nation is gradually rolling into another election year and the Independent National Electoral Commission (INEC) is in full gear to conduct the poll that will see another set of leaders taking positions in the country.
Last week, the electoral agency revved up the process by releasing the list of contenders across the 18 political parties for the federal positions, scheduling the list of aspirants for electoral offices in the 36 states for October 4th.
The economy is experiencing an election frenzy and this has impacted investors’ mood in the nation’s capital market where activities have been on a steep dip. Last week, the All-Share Index and the market capitalisation depreciated by 0.91 per cent, closing the activities at 49,026.62 and N26.45 trillion respectively.
The result is the third week of consecutive loss on the exchange during which sell-pressure was witnessed on the share prices of notable stocks.
Academy Press lost 22.73 per cent to close at N1.70; NGX Group shed 13.92 per cent to N17; Cadbury Nigeria dipped by 13.82 per cent to N11.85; BUA Cement declined by 10.39 per cent to N47.85, and CWG fell by 10 per cent to 0.81k.
The domestic market year-to-date (YTD) return moderated to 15.16 per cent on accounts of the stocks that declined during the week’s trading session.
The sectoral performance showed that four, out of the five indices that were tracked, closed in the negative zone. The oil and gas index saw the worst decline, dropping 4.68 per cent to close at 507.25 basis points. It was trailed by the industrial index which shed 3.92 per cent to 1,721.36 basis points; while the insurance and consumer goods indices dropped by 2.08 per cent and 0.16 per cent to 174.26 basis points and 605.09 basis points.
In contrast, the banking sector traded northward as the index rose by 2.27 per cent to close at 382.59 basis points, buoyed by positive sentiment in some fundamental stocks. Fidelity Bank rose by 10.85 per cent to N3.78; Unity Bank saw a 10 per cent rise to 0.44k; Access Holdings inched up by 6.02 per cent to N8.80, and United Bank of Africa appreciated by 3.1 per cent to N7.30
While investors are already apprehensive of the Nigerian general elections, the decision to be taken by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its September meeting which commences today (Monday) may make or mar their sentiments.
A number of issues have contributed to the bearish trend, the National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said, asserting that the equity market is reflecting the current economic reality.
“Our economy is sluggish and profit-taking is already going down as we move on to the last quarter of the year. We were able to get some interim dividends from some companies and are waiting for the final outcome of their full year.
“Do not also forget that Nigeria’s general election is also on its way. These are the factors militating against the market. The foreigners either are taking their time or are on their way out of the country to avoid a likely election crisis in the country, especially as insecurity is taking a toll on the economy.
“Foreign exchange problem is there too, and also, the regulators’ over-bearing in the market,” Okezie noted.
He, however, raised the hope that the market could pick up before year-end, stressing that a “bad economy” has been the major problem deflating the domestic bourse valuation as nothing presently entices investors to really embrace the market.
“It is not there even when the companies appear to be doing well, most especially the banks that are not compelling investors to approach the market,” Okezie added.
Meanwhile, NGX’s weekly report stated that a total turnover of 562.856 million shares worth N9.44 billion in 16,013 deals was traded last week by investors in contrast to a total of 719.398 million shares valued at N8.004 billion in 17,444 deals that exchanged hands in the week before.
The financial services industry, measured by volume, led the activity chart with 381.958 million shares valued at N4.55 billion traded in 8,627 deals and contributed 67.86 per cent and 48.21 per cent to the total equity turnover volume and value respectively.
This was followed by the information and communications technology (ICT) Industry with 59.345 million shares worth N2.48 billion in 1,272 deals traded in the week, even as the services industry recorded a turnover of 32.212 million shares worth N95.81 million in 607 deals.
The report also showed Zenith Bank, NGX Group and Guaranty Trust Holding Company as the top three traded stocks measured by volume, and accounted for 183.929 million shares worth N3.499 billion in 3,628 deals, contributing 32.68 per cent and 37.07 per cent to the total equity turnover volume and value respectively.
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