Stock market: Investors lost N2.15trn in 13 days


Investors in the capital market recorded a loss of about N2.15 trillion in 13 days this year following currency volatility and uncertainty in global crude oil prices that triggered profit-taking in the equities market.stock market
As at yesterday, the market capitalisation of the Nigerian Stock Exchange (NSE) stood at N7.7 trillion as against N9.850 trillion recorded at the close of trading on December 31, 2015, representing average investors’ loss of 22 per cent.
The Chief Executive Officer, NSE, Mr. Oscar Onyema, explained that the performance of the market indices were reflections of scenarios in the global economy.
Mr. Onyema, at the recent NSE 2015 Market Recap and Outlook for 2016 event held in Lagos said many emerging markets were likely to continue to experience recession due to weakening oil and commodity prices.
“Among emerging markets, recession has materialized in Brazil and Russia, and the trend is likely to continue amid weakening oil and other commodity prices. In Sub-Saharan Africa, while the recent performance of Nigeria and South Africa has been lackluster, the overall region has weathered the commodity slump better than Latin America and elsewhere, with growth slated at 4.3 per cent in 2016, up from 3.8 per cent in 2015. “This growth is expected to be supported by the moderate recovery in the global economy and growth in low-income developing countries, which compared to 2015, are projected to grow by one more percentage point to 5.8 per cent in 2016”, he said adding that the uncertainty and volatility dominated the forecast for this year and beyond as Nigeria struggled with commodity price shocks and the resultant impact on the naira.
Industry operators have speculated that the management of NSE might introduce the circuit breakers rule as investors’ profit-taking increases. With circuit breaker, The Exchange has the power to halt trading activities for 30 minutes in the event of a sharp drop (up to five per cent) in the value of the All Share Index (ASI) from the previous day’s close between 10:15 a.m. and 1:45 p.m.
Also, The Exchange shall not halt trading if a Significant Market move occurs after 13.45 p.m. The Exchange shall halt and reopen trading based on a Significant Market move only once per trading day.
Finance analysts believe that some of these factors shocked both local and foreign investors and created uncertainty in the investment environment, which led to a retreat on the part of bargain hunters.
Investors have continued to sell-off stocks as capital market, equities segment fell N32 billion on Tuesday to near a three-and-half-year low after reports that naira hit a new trough of N305 to a dollar at the parallel market, weighed down by sliding oil prices and the Central Bank of Nigeria (CBN) decision to curb dollar supply to Bureau de Change (BDC) operators.
Transactions on the Nigerian Stock Exchange (NSE) maintained the negative trend as market capitalisation declined further by 0.42 per cent due to investors’ massive sell-offs.
Specifically, the market capitalisation shed 0.42 per cent to close at N7.723 trillion as against N7.755 trillion recorded on Monday.
An analysis of the price movement table indicated that Nestle Nigeria Plc led the losers’ pack with a loss of N27.95 to close at N67.10 per share.
Seven Up Plc trailed with a loss of N4.25 to close at N162.00, while Flourmills Plc dropped 93 kobo to close at N17.85 per share. Ecobank Transnational Incorporated declined by 76 kobo to close at N14.59, while Chemical And Allied Company Plc dipped by 59 kobo to close at N37 per share.
Conversely, West African Portland Cement Plc led the gainers’ table, increasing by N1.70 to close at N8.00 per share. International Breweries Plc gained N1.40 to close at N16.30, while UAC Plc increased by 82 kobo to close at N17.22 per share.
Zenith Bank Plc grew by 55 kobo to close at N9.55, while Stanbic IBTC Bank Plc went up by 52 kobo to close at N12.75 per share. In all, investors traded 256 million shares valued at N1.973 billion exchanged in 4,731 deals.
Meanwhile, the Exchange in its domestic & foreign portfolio participation in equity trading report for 2015 noted that both domestic and foreign investors traded a total sum of N1.91 trillion.
According to NSE report, total foreign transactions decreased by 33.39per cent from N1.52 trillion recorded at the end of 2014 to N1.03 trillion at the end of 2015 while total domestic transactions decreased by 22.53per cent from N1.14 trillion recorded at the end of 2014 to N880.56 billion recorded at the end of 2015.


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