Investors lose N265bn as stock market falls further

Investors in the equities market of the Nigerian Stock Exchange saw the value of their investments decline by N265bn on Thursday.

After the listing of Airtel Africa Plc’s shares on the NSE on Tuesday, the market capitalisation of equities was lifted above N14tn as the market recorded a marginal gain at the close of trading.

The market shed N30bn on Wednesday and N265bn on Thursday as the market capitalisation dropped from N14.258tn on Wednesday to N13.993tn on Thursday.

Analysts at Afrinvest Securities Limited said the negative performance on Thursday was due to sell pressures in bellwether stocks, namely Airtel, MTN Nigeria Communications Plc and Nestle Nigeria Plc, which dragged the All Share Index lower by 186 basis points to settle at 28,712.90bps while the year-to-date return worsened to -8.6 per cent.

Activity level also declined as volume and value traded dipped by 0.2 per cent and 14.6 per cent to 188.4 million units and N3.2bn, respectively.

The top traded stocks by volume were FBN Holdings Plc (50.1 million units), Zenith Bank Plc (21.1 million units) and Access Bank Plc (18.9 million units) while MTN Nigeria (N724.9m), Zenith Bank (N404.3m) and Guaranty Trust Bank Plc (N380.7m) led the top trades by value.

Investor sentiment weakened to 0.6x from 0.9x on Wednesday as 18 losers outweighed the performance of the 10 gainers recorded.

The top five gainers were Sovereign Insurance Plc, Courteville Business Solutions Plc, GTB, Lafarge Africa Plc and Transnational Corporation Plc, which gained 4.76 per cent, 4.55 per cent, 3.27 per cent, 1.11 per cent and 0.99 per cent, respectively.

The top five losers were AXA Mansard Insurance Plc, Airtel Africa, Cement Company of Northern Nigeria Plc, Consolidated Hallmark Insurance Plc and Nestle, whose respective share prices depreciated by 10 per cent, 9.99 per cent, 9.77 per cent, 9.09 per cent and 4.83 per cent.

The price of Airtel Africa shares has dropped by 18.98 per cent in the last two days.

The share price, which rose from a listing price of N363 to N399.30 on Tuesday, dropped by 9.99 per cent on Wednesday to close at N359.40.

The telecommunications company’s share price dropped further on Thursday, shedding 9.99 per cent to close at N323.50.

Airtel Africa listed on the NSE on Tuesday, about two weeks after its listing on the London Stock Exchange, offering 3,758,151,504 ordinary shares, which makes it the third-largest company on the NSE by market value, after Dangote Cement Plc and MTN Nigeria Communications Plc.

Analysts at Meristem Securities Limited said Airtel shares could be mirroring its performance on the London stock market where it dropped as much as 15 per cent the day after it listed in London on June 28.

 

They said, “MTN Nigeria has been trading over-the-counter before its listing in May, unlike Airtel, but added that a tax dispute with the Nigerian government may have dented MTN’s valuation.

“MTN said it will sell more shares once the tax issue is resolved. Airtel’s listing valuation provides a comparable for MTN Nigeria, which has a return on equity of 93 per cent as against Airtel Africa’s 50 per cent.”

Commenting on the nation’s stock market performance, analysts at Afrinvest said, “While we expect the downward trend to continue in the near term, it presents opportunities to position in premium stocks.”

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