Investors Lose N636.8bn In June In Stocks’ Highest Monthly Loss
By CHUKWUMAH KELECHUKWU.
Nigerian equities market booked the highest monthly losses of N636.8billion in June less barely a month after the listing of MTN Nigeria shares on May 16, 2019, dashing expectations that the telecom firms would improve the fortunes of the exchange.
The Nigerian Stock Exchange (NSE) listed by introduction, 20.35 billion ordinary shares of MTN Nigeria Communications Plc at N90 per share, a development that lifted equity capitalization of the Exchange by N1.83trillion to N12.525trillion at the close of trading on Thursday, May 16.
But market hype and bullish trend that ensued from MTN listing have since faded with governance issues that trailed the listing a week after, leaving the market grappling with the backlash of prolonged bearish grip.
Two more trading days before end of June, precisely Wednesday, June 26 2019, the NSE All Share market cap weighted index booked -5.81 percent decline year-to-date (YTD), trading at a price-to-earnings ratio of 7.33, far lower than Nairobi Stock Exchange returns of +5.68% YTD weighted index, and price-to-earnings ratio of 11.64.
On week-on-week basis, the performance indicators depreciated by 4.70 percent, the highest weekly losses recorded by the market since the beginning of the year, stockbrokers said.
Equities trading on the Nigerian bourse opened for the month of June with the market capitalisation weighted index at N13.684trillion while the All Share Index stood at 31, 069.37 points. But as at close of business on Wednesday, the twin performance indicators depreciated to N13.047trillion and 29, 609 points respectively.
With two more trading days to the end of the month, stockbrokers said there was no indication the bearish trend would be reversed since there are no positive catalysts to that effect.
Chief Executive Officer, Valmon Securities Limited, Mr. Tajudeen Olayinka, blamed the prolonged bear grip on the general situation of the economy where demand has been too low in relation to supply.
According to him, the demand side of the market has been too low, and those who are offloading shares are doing to so to reduce losses since they are not sure as to when the market bear grip could be reversed.
“We have seen very low bid for shares while the sale side has been pressured. Those who are selling said they are afraid of losing more since they are not sure as to when the market could bounce back,” Tajudeen told InsideBusiness.
Gains recorded by heavy weight Seplat Petroleum (1.01%), Nigerian Breweries (6.90%), Forte Oil (4.83%), Berger (6.72%) ETI (2.93%) and 11 other shares were not sufficient to wipe off the losses by 19 stocks led by heavily capitalized stocks of Nestle Plc (-3.52%), Beta Glass (-9.97%), CCNN (-9.77%), Cadbury (-6.39%), and MTN Nigeria (-0.39%) dragged down the All Share Index by 0.20 percent.
Consequently, investors lost N26.3billion as market capitalisation declined to N13.0trillion. Driven largely cross deals in the shares of Wema Bank Plc (194.7m units), total volume of trades increased by 55.52 percent to 394.06 million units, valued at N3.27 billion, and exchanged in 3,377 deals.
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