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Index declines further as market extends losses

By on February 12, 2015

The Nigerian equities market extended its losses for the second day this week as investors continued to adopt cautions trading following the shift of general elections by six weeks. The market had dipped the previous day after the shift in the elections, thereby extending anxiety among investors.

At the close trading yesterday, the market recorded another decline with the Nigerian Stock Exchange (NSE) All-Share Index, shedding 0.80 per cent to close at 29,125.69, while market capitalisation shed N78.4 billion to close at N9.718 trillion.

As a  result,  the year-to-date decline in the ASI closed at 16 per cent. Only nine stocks appreciated compared to 25 stocks that depreciated.

Apart from the ASI, all other sectoral indicators shed closed lower. For instance, the NSE Oil & Gas Index went down by 1.9 per cent driven by Forte Oil and Oando Plc which fell by 5.0 per cent and 4.0 per cent respectively.
Similarly, the Banking Index lost 1.4 per cent due to a loss of 5.0 per cent suffered by Guaranty Trust Bank Plc among others.

The losses sustained in Nigerian Breweries (2.0 per cent) also led to the decline in the market.

The NSE Consumer Goods Index shed 1.0 per cent, while the NSE Insurance Index and NSE  Industrial Index went down by 0.3 per cent and 0.1 per cent in that order.

According analysts at Meristem Securities Limited, “The  negative sentiment ravaging the equities market  may be as a result of the recent shift in general elections, as investors’ perception towards the stock market further deteriorates.”

Also,  analysts at WSTC Financial Services Limited, said  the rescheduling of the elections was deferring both socio-political stability and reprieve for the financial markets.

“Summarily, we believe that the rescheduling of the general elections is tantamount to deferring both socio-political stability, and consequently, reprieve for the financial markets. We believe this does not in any way bode well for ailing investors’ confidence and already lean capital inflows,” they said.
They added that  the lull in the equities market will remain, at least, in the pre-election period, given a strong positive correlation between the performance of the Nigerian equities market and investors’ perception of domestic risks.

 

[ThisDay]