Proceedings on the floor of the Nigerian Stock Exchange (NSE) kick started the new week on a bearish note as investors took profit in highly capitalised stocks.
At the close of transactions, the All Share Index (ASI) dropped 0.34 per cent to settle at 41,564.31 points as a result of profit-taking in GT Bank, PZ and Champion Breweries. Consequently, the year-to-date (YTD) return declined to 3.2 per cent while market capitalisation fell by N74 billion to close at N21.744 trillion.
Further analysis of the market revealed that the market activity level waned as the volume and value of stocks traded fell by 29.4 and 52.7 per cent respectively to 340.3 million units and N2.6 billion, exchanged in 5,251 deals. Commenting on the performance of the market, Chief Executive Officer, Highcap Securities, David Adonri, linked the bearish performance to investors exiting the market.
According to him, the Central Bank had adopted a reduction-in interest rate –policy and so a lot of people that usually invest in debt instruments discover that the interest rate was too low and some of them moved into equities and foreign exchange markets which in turn heated the market.
“Now that overheating has plunged the economy into serious escalated inflation such that the CBN is now worried. Secondly, these investors do not trust that full year results from quoted companies on the NSE would be spectacular and this is because year 2020 was not that good enough due to the COVID-19 pandemic. So a lot of them have now decided to sit back or exit the market to watch what would happen which is why we are experiencing the bears”, he explained.
For their part, Afrinvest, said, “We expect trading sessions to be a mix of bargain hunting and sustained profit-taking activities. The direction of yields in the fixed income market would also influence trades especially given the increase in marginal rates at the OMO auction this week”.
Union Bank of Nigeria (UBN) was the most active stock with the sale of 78.08 million shares valued at N457.06 million, FBN Holdings sold 54.24 million shares valued at N396.42 million while Access Bank traded 33.95 million shares worth N289.60 million.
Meanwhile, investors’ appetite for stocks increased as 23 stocks appreciated while 16 others depreciated. MCNICHOLS topped the gainers’ chart with 9.59 per cent to close at 0.80 kobo per share, UPDCREIT followed with 9.09 per cent to close at N6, Multiverse gained 8.33 per cent to close at 0.26 kobo, Fidson increased with 8.30 per cent to close at N6 while Africa Prudential garnered 8.21 per cent to close at N7.25.
On the other hand, Champion led the laggards with 9.75 per cent to close at N2.50 per share. PZ was next with 9.73 per cent to close at N5.10, Jaiz Bank lost 9.72 per cent to close at 0.65 kobo, Cornerstone fell by 9.23 per cent to close at 0.59 kobo while RT Briscoe decreased by 9.09 per cent to close at 0.20 kobo.
– Sun