Nigerian equities lost N215 billion in the first week of 2017, raising a spectre of previous hangover for Nigerian investors that had lost N3.98 trillion in three successive years.
In apparent rush to rebalance portfolios and take profits on recent gains, investors pushed up supply beyond demand and turned the stock market into a buyer’s market, forcing most transactions to close at lower prices. Profit-taking transactions on highly capitalised stocks further exacerbated the selloff.
Benchmark indices at the Nigerian Stock Exchange (NSE) at the weekend indicated a week-on-week average decline of 2.32 per cent, equivalent to net capital loss of N215 billion. With 31 losers to 18 gainers, aggregate market value of all quoted companies dropped from the year’s opening value of N9.247 trillion to close the first week at N9.032 trillion.
The All Share Index (ASI), the value-based common index that tracks prices at the Exchange, declined from the year’s opening index of 26,874.62 points to close the week at 26,251.39 points. All sectoral and group indices also followed the downtrend, underlining the spread of the selloff.
The NSE Industrial Goods Index recorded the highest loss of 3.02 per cent. The NSE Industrial Goods Index followed with a negative return of 2.28 per cent. The NSE 30 Index, which tracks the 30 most capitalised companies on the Exchange, declined by 2.05 per cent. The NSE Oil and Gas Index dropped by 1.64 per cent. The NSE Banking Index lost 1.57 per cent while the NSE Insurance Index slipped by 0.17 per cent.
On stock by stock basis, Nigerian Aviation Handling Company (Nahco) recorded the highest loss, in percentage terms, of 13.9 per cent to close at N2.72. Cement Company of Northern Nigeria followed with a drop of 13.4 per cent to close at N4.33. NEM Insurance lost 9.5 per cent to close at 95 kobo. Sterling Bank dropped by 7.9 per cent to close at 70 kobo while Cadbury Nigeria slipped by 7.7 per cent to close at N9.50 per share.
On the other hand, UACN Property Development Company recorded the highest gain of 14.5 per cent to close at N3. United Capital followed with a gain of 10.6 per cent to close at N3.02. Access Bank rose by 7.0 per cent to close at N6.28. Eterna added 6.5 per cent to close at N3.30 while FCMB Group rose by 6.4 per cent to close at N1.17 per share.
Total turnover stood at 4.32 billion shares worth N7.386 billion in 9,330 deals, a significant increase on a total of 405.94 million shares valued at N3.72 billion traded in 6,363 deals in the previous week. Financial services sector dominated the activities chart with a sectoral turnover of 4.18 billion shares valued at N5.31 billion traded in 5,047 deals; representing 96.7 per cent and 71.9 per cent of the total equity turnover volume and value respectively.
The oil and gas sector occupied a distant second with 65.83 million shares worth N594.52 million in 1,385 deals while the conglomerates sector placed third with a turnover of 26.49 million shares worth N48.16 million in 299 deals.
Turnover was driven largely by cross deals recorded in Unity Kapital Assurance. Altogether, Unity Kapital Assurance Plc, Omoluabi Savings and Loans Plc and FCMB Group Plc accounted for 3.86 billion shares worth N3.01 billion in 286 deals, representing 89.5 per cent and 40.9 per cent of the total equity turnover volume and value respectively.
Also traded during the week were a total of 55 units of Exchange Traded Products (ETPs) valued at about N506 in 11 deals, compared with a total of 9,965 units valued at N56, 446 traded in 16 deals in the previous week.
In the debt segment, a total of 5,100 units of Federal Government Bonds valued at N5.12 million were traded this week in two deals.
Nigerian equities had closed 2016 with a net capital loss of N604 billion in spite of a strong last-month rally in December that saw equities rallying N558 billion gain in 19 trading sessions. The benchmark indices for the Nigerian stock market showed a full-year average year-on-year decline of 6.17 per cent for 2016, equivalent to a net capital loss of N604 billion.
With inflation rate at 18.5 per cent as at November 2016, benchmark interest rate at 14 per cent, the adjusted average nominal real return for the equities market summed up to -38.67 per cent in 2016, implying that an average investor had lost more than one-third of his portfolio value.
On the face of it, the performance in 2016 might be seen as an improvement on the whopping losses in the previous two years but it actually represents a continuation of a losing streak that has seen equities losing N3.98 trillion in the past three years. Nigerian equities had lost N1.75 trillion in 2014 and compounded this with a loss of N1.63 trillion in 2015.
The All Share Index (ASI), the value-based common index that tracks prices at the Nigerian Stock Exchange (NSE), closed 2016 at 26,874.62 points as against its 2016’s opening index of 28,642.25 points. Total market value of all quoted equities also declined from 2016’s opening value of N9.851 trillion to close the year at N9.247 trillion.
Over a three-year period, investors in the Nigerian equities market had lost N3.98 trillion. Total market value of all quoted equities on the NSE had started 2014 at N13.226 trillion.
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