Nigerian equities investors lose N2.1trn amid positive year end

JUST a day to the end of the year 2018, investors in the Nigerian stock market have lost N2.066 trillion naira, following persistent weak demand for stocks in a bear market, with a major lift this month as the equities market ended positively, having recorded Christmas rally gains.

Despite predictions in the beginning of the year, hinged on recovery in 2017 with a record gain of 42.3 per cent, Year to Date (YtD) loss of market capitalization of the Nigerian Stock Exchange (NSE) stands at -16.7 per cent having reduced by N2.0664 trillion to N11.337 trillion from N13.609 trillion recorded at the close of the year trading 2017.

The all Share Index (ASI) also dipped to 31,037 basis points in contrast to 38,243 basis points recorded at the end of year 2017, thus leaving the YtD loss at -18.8 per cent.

According to market players, the year 2018 had been a tough one with political instability, uncertainity about the forthcoming elections as well as activities in the developed countries which impacted negatively on emerging markets across the globe, in which Nigeria was not an exemption. Although many of the emerging and frontier markets were affected by the flight to safety by investors due to increase in rates in the United States, the Nigerian case was compounded by sell down by some investors to guide against negative impact of the forthcoming general elections.

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According to the Acting Director-General of the Apex regulatory body of the Nigerian capital market, Security Exchange Commission (SEC), a large percentage of those who do business in the Nigerian market are foreign investors.

“And as at the third quarter of 2018, the capital outflow stood at N513 billion as against N477.7 billion incoming. We can see that the impact of increase in interest rate in advanced economies not just in the United States, has impact on capital outflow thereby leading to reduced performance in our markets. This does not affect only Nigeria but also affects other emerging and frontiers market in the world.”

Last week, the equities market closed in  line with expectations , though  with  a  marginal appreciation, just as analysts at Vetiva predicts that investors would likely continue to take positions on the final trading day of the year as positive session is expected to close out the year with heightened activity levels.

Meanwhile, a total turnover of 3.129 billion shares worth N14.348 billion in 10,394 deals were traded by investors on the floor of the Exchange in contrast to a total of 1.472 billion shares valued at N18.678 billion that exchanged hands preceding week in 15,610 deals.

The Financial Services Industry (measured by volume) led the activity chart with2.578 billion shares valued atN9.397 billion traded in 5,631 deals; thus contributing82.38% and 65.49% to the total equity turnover volume and value respectively. The Services Industry followed with 385.985 million shares worthN974.145 million in 236deals.

The third place was Conglomerates Industry with a turnover of 88.808 million shares worth N141.884 million in613deals.

Trading in the Top Three Equities namely NEM Insurance Plc, WEMA Bank Plc, and Medview Airline Plc, (measured by volume) accounted for 2.415 billion shares worth N5.536 billion in291 deals, contributing 77.18% and 38.58% to the total equity turnover volume and value respectively.