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NSE Market capitalisation dips by N1.16tn in three days

By on January 9, 2015

The renewed dumping of shares by investors at the stock market over uncertainty in the political landscape has led to a  dip of N1.160 trillion in the market capitalisation of the Nigerian Stock Exchange (NSE) in the first three trading days of the year.

Having  closed 2014  with a decline of 16. 1 per cent, the stock market opened for 2015 on bearish note last Monday. The rampaging bears have tightened their grip on the market, leading to depreciation of N1.16 trillion in three days. The market capitalisation nose-dived from N11.478 trillion to N10.318 trillion, while the NSE All-Share Index plunged from 10.1 per cent from 34,657.15 to close at 31,167.54.

There appears to be a free fall in the prices of blue chip stocks, leading to the massive value erosion in the market.  Analysis of the depreciation showed that it went down by N240 billion on Monday, N471 billion on Tuesday and N449 billion on Wednesday.

Market operators, who spoke to THISDAY yesterday said the dumping of shares by investors was a result of the uncertainty in the polity  because investors are trading cautiously, waiting until after the general elections slated for next month.

“Unfortunately, while there has been massive dumping of shares, there are few investors willing to part with their funds right now. Everybody is waiting for the elections to be over before making any serious investment decision. But I believe the slide in the market will reduce very soon because bargaining hunting will begin given the attractive prices of most of the stocks,” a stockbroker said.

Only eight stocks appreciated compared with 41 others that depreciated. Presco Plc led the price gainers with 10.2 per cent, trailed by PZ Cussons Nigeria Plc with gain of 5.2 per cent. Wema Bank Plc rose by 3.3 per cent just as Forte Oil Nigeria Plc appreciated by 3.01 per cent.

Conversely, Guinness Nigeria Plc led the price losers’ chart with 9.74 per cent, trailed by Zenith Bank Plc with decline of 9.71 per cent. Guaranty Trust Bank Plc dipped by 9.7 per cent, just as Diamond Bank Plc and First City Monument Bank Plc went down by 9.4 per cent and 9.39 per cent.

 

[ThisDay]