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Investors shrugged off market uncertainties to take advantage of crashing prices, snapping up telecom equities (AirTel Africa and MTNN) as well as Dangote Cement with huge sums of money.
Bargain hunting investors poured into MTN Nigeria the sum of N1.8 billion to mop up 9.116 million units in 198 deals at a discount of -10 kobo or -0.1 percent to close lower at N197 as against the opening price of N197.10 per share.
AirTel Africa, Nigeria’s second largest telecom company also recorded an inflow of N813.3 million in 29 trades in which investors grabbed 640, 456 units of the stock at a flat price of N1, 275 per share.
Dangote Cement Plc was the most vulnerable as bargain hunting investors slashed N24.50 or a maximum -10 percentage daily loss limit off the equity price, closing lower at N220.50 down from opening at N245 per share.
“The time to take a position in these shares is now. The heavy-weight stocks are trading at discounted prices far below their fundamentals,” says Garba Kurfi, the MD/CEO of Lagos-based APT Securities and Funds Ltd.
Like a roller coaster, the Nigerian equities market has progressed with wild swings up and down that left performance indicators at their lowest levels today since 11 January, and 18.84 percent lower than its May 27 high.
With Central Bank’s aggressive rates hike to battle rapid inflation and crippling foreign exchange liquidity crisis, investors have accelerated migrations away from crashing equities into fixed income markets.
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In its last Monetary Policy Committee (MPC) meeting, Nigeria’s apex bank had recently hiked the monetary policy rate (MPR) otherwise called the interest rate to 15.5 percent and the cash reserve ratio to 32.5 percent. Since then, equities trading at the Nigerian Exchange has been marked by a steady decline and resilience.
At the close of trading today, Dangote Cement’s -10 percent, AirTel Africa’s -2.8 percent, and GTCO’s -3.2 percent losses, helped the Lagos bourse extend its two-day bear run.
Consequently, the benchmark index went down 1.64 percent weaker, offsetting earlier week gains – to settle at 43,895.25 points.
Despite gaining in three of five trading sessions this week, the All Share Index (ASI) closed 1.13 percent lower week on week, extending past week’s losses.
On a week on weekly basis, AirTel Africa depreciated by -2.83 percent, Dangote Cement by -10 percent, and GTCO by -3.24 percent.
The month-to-date (MTD) losses increased to -10.4 percent while year-to-date gains moderated to 2.76 percent, even as the market capitalization shed ₦271.99 billion week-on-week to close at ₦23.91trillion.
An analysis of the activity levels showed that the total volume and value traded declined by 36.1 percent and 14.8 percent week on week, respectively.
Save for the Industrial Goods (+0.3%) index that closed positive, all other sectoral indices — Insurance (-2.4%), Consumer Goods (-0.4%), Banking (-0.1%), and Oil and Gas (-0.2%) – recorded losses.
BADEJO ADEMUYIWA has 23 years experience as a Finance Writer, specialising in Insurance and Investigative Reporting.
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