Stocks Balk As VAT On Transactions Returns Thursday
By CHUKWUMAH KELECHUKWU
Stocks balked on Wednesday, giving up part of 1.21 percentage gain recorded previous day following price depreciation in bluechip Nestle (-2.0%), Dango
Although price gainers and losers tied at 16, the tribe of losers is dominated more by heavily capitalized stocks including Total Plc (-1.8%), WAPCO (-1.7%), Dangote Sugar (-1.7%) and UACN (-4.2%).
Consequently, the losses recorded in the 16 laggards summed up to N27.4 billion, pulling down market capitalisation to N13.689 trillion, from N13.716 trillion previous day.
Similarly, the Nigerian Stock Exchange (NSE) All Share Index which measures performance of traded equities dipped 20 basis points to 28,088.74 points, down from 28,144.87 basis points while year-to-date losses settled at -10.6 percent.
The disappointing relapse of the market is coming a day before reintroduction of VAT charges on transaction on the NSE. VAT charge on transactions in the Nigerian Capital Market was suspended in 2014 by the former coordinating minister of the economy and minister of finance, Dr. Ngozi Okonjo-Iweala.
With the expiration of the five year exemption period on the order which took effect on 25 July 2014 and with no extension in sight, VAT will become effective from July 25th, 2019.
However, there was improvement in activity level at the exchange on Wednesday as volume and value traded rose by 16.7 percent and 20.6 percent to 157.7m units and N2.5billion respectively.
The top traded stocks by volume were Guaranty Trust Bank (33.6m units), UBA (30.1m units) and Zenith Bank (22.9m units) while the leading stocks by value were GT Bank (N971.4m), Zenith Bank (N428.1m) and MTNN (N331.1m).
Performance across sectors was mixed as three of six indices recorded gains. The Oil & Gas Index led the gainers, reversing yesterday’s loss with a gain of 4.5 percent on the back of price appreciation in SEPLAT (+9.4%).
The Consumer Goods Index trailed closely, rising 0.3 percent following gains in Nigerian Breweries (+6.9%),
On the flip side, the Industrial Goods Index led the laggards with -1.2 percent following sell offs in WAPCO (-1.8%) andDangote Cement (-0.6%). The Banking Index declined by -0.2 percent as investors exited positions in GT Bank (-0.9%) andSterling Bank (-3.7%). The ICT Index closed flat.
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