COVID19: Equities market shed N399.82bn in a week

Amid the rising cases of coronavirus in Nigeria, presidential directive to lockdown Lagos state and Abuja for 14 days and further drop in crude oil prices, especially Bonny Light which fell to USD21.41 per barrel on Thursday, April 2, 2020, from $24.83 per barrel on Thursday, March 26, 2020, the Nigerian equity market depreciated by 3.51 per cent week-on-week, (WoW).

Consequently, the All Share Index (ASI) and market capitalisation of the Nigerian Stock Exchange (NSE) declined by 3.51 per cent to close for last week at 21,094.62 absolute points and N10.99 trillion respectively as against 21,861.78 absolute points and N11.39 trillion recorded in the preceding week.

This in nominal term translates to a loss of N399.82 billion in market capitalisation value (WoW).

Amid sustained bearish activity, most of the sub-sector gauges declined: the NSE Banking, the NSE Consumer Goods, the NSE Industrial and the NSE Insurance indices fell by 5.26 per cent, 3.93 per cent, 1.22 per cent and 0.27 per cent, respectively to 234.47 points, 314.16 points, 1,028.33 points and 117.77 points respectively.

Only the Oil & Gas sector closed positive by 2.33 per cent week-on-week basis, driven by renewed hope of an unprecedented output cut from the OPEC+ cartel in the coming week, after the U.S. president intervened in the ongoing “oil price war between Riyadh and Moscow.

However, transaction volumes increased by 5.71 per cent to 1.53 billion shares. A total turnover of 1.534 billion shares worth N11.267 billion in 18,928 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.452 billion shares valued at N14.918 billion that exchanged hands last week in 21,828 deals.

The Financial Services industry (measured by volume) led the activity chart with 1.105 billion shares valued at N7.100 billion traded in 12,225 deals; thus contributing 71.99 per cent and 63.02 per cent to the total equity turnover volume and value respectively.

The Industrial Goods followed with 218.471 million shares worth N1.236 billion in 1,610 deals. The third place was the Consumer Goods industry, with a turnover of 134.599 million shares worth N1.855 billion in 2,332 deals. Trading in the Top Three Equities namely, Sterling Bank Plc, Zenith Bank Plc and Meyer Plc. (measured by volume) accounted for 752.359 million shares worth N3.247 billion in 4,039 deals, contributing 49.03 per cent and 28.82 per cent to the total equity turnover volume and value respectively.

In the absence of any major breakthrough in efforts to find a lasting solution to the scourge of Covid-19, globally and domestically, Analyst at GTI expect sentiment on the local bourse to remain subdued in this week.

“Nonetheless, we believe the current attractive valuation of many fundamentally viable stocks in the Nigerian market offers a potential medium-to-long term alpha return to desiring investors.”

Cordros Capital analysts expect the local bourse to close in red territory amid low crude oil prices. “As more state governors take stricter measures to strengthen social distancing mandate, we expect share prices to moderate. Notwithstanding, we expect investors to take position in companies with high beta and dividend yield,” they advised.

 

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