Equities market sheds N1.36trn in one month

Following investors’ profit-taking in bank shares, Industrial goods, among others, investors on the equities market segment of the Nigerian Stock Exchange (NSE) lost N1.36trillion in February.

The NSE in February was not immune to the rout in global equities as the market suffered its fourth consecutive weekly loss, amid growing concerns about the rising yields in the money market instrument.

Again, the NTB auction results wherein stop rates rose by an average of 254bps to 3.67per cent (from 2.33 percent at the last auction) also weighed on investors’ sentiment on the NSE.

February has been turbulent for investment as the exchange confronted headwinds from internal vulnerabilities like profit-taking, market correction as well as pressure from less than impressive earnings reports.

Our correspondent gathered that the NSE market capitalization closed on Friday at N20.832 trillion, N1.36trillion from N22.187 trillion it opened for trading.

Also, the NSE All-Share Index dropped by 2,612.77 basis points or 6.16 percent to close at 39,799.89 basis points from 42,412.66 basis points the market opened for trading in February.

With the decline, the equities market performance in its Year-Till-Date closed at 1.17per cent. Our correspondent also gathered that the NSE Insurance index performed worst in February, dropping by 17.82 percent to 202.09 basis points.

NSE Banking Index dropped by 9.73 percent to 382.76 basis points while NSE Lotus II and NSE Industrial good index dropped by 6.12 percent and 8.80 percent respectively. On the flip side, NSE Oil /Gas gained 4.36 percent to 265.30 basis points in February.

Capital market analysts stated that the February performance of the NSE is a reflection of investor’s swing for money market instruments, stressing that dwindling yields over time had sustained the equities market growth.

Speaking on market performance for January, the head of research, PanAfrican Capital Holdings Limited, Moses Ojo said the modest yield environment in the money market instrument drive equities market performance in February, stressing that the trend might not continue towards the end of the first quarter.

The managing director/CEO of APT Securities and Funds Limited, Mallam Garba Kurfi, also said, “As long as low yield in the money market persists, we will continue to have liquidity in the capital market.

APT Securities and Funds expected the equities market to have a gradual rise in prices over the course of the year, said, “The outstanding performance recorded by the market in the previous year would not likely repeat itself.

“Hence, we would continue to advice investors to take a position in fundamentally sound stocks with good growth prospects.”

The chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion had predicted that “the equities market is to witness volatility, even as the outlook remains mixed due to likely price corrections, or pullbacks for a few days due to profit-taking and portfolio reshuffling ahead of year-end and 2021 corporate actions.

“The anticipated correction will strengthen recovery.

Despite the rising inflation, insecurity, and the second wave of coronavirus, this wave will further boost the healthcare sector due to government and CBN commitment to enhancing public health.”