Most Nigerian equities closed weekend at their lowest prices. A net loss of N139 billion in the four trading sessions last week worsened the net loss over the 11-month period to N2.04 trillion.
Average year-to-date return depressed further to -17.17 per cent, exacerbated by average net capital depreciation of 1.18 per cent during the week.
Investors have so far lost N288 billion this month, 164.2 per cent increase on N109 billion net capital loss recorded in October. November has seen increased political activities with the onset of election campaign period and the unveiling of policy documents by the two major political parties.
Also during the week, the agenda-setting Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) unanimously voted to retain all policy rates during its last meeting for the year. The MPC retained Monetary Policy Rate (MPR) at 14.0 per cent with the asymmetric corridor of +200 basis points and -500 basis points, Cash Reserve Ratio (CRR) at 22.5 per cent and Liquidity Ratio (LR) at 30 per cent.
Major quoted companies headlined the decline led by Africa’s largest cement company and the main stock of Africa’s richest man, Dangote Cement Plc, which slumped to a low of N195. Others include Dangote Cement’s main competitor, Lafarge Africa Plc, at N14; Julius Berger Nigeria, N20.50; Access Bank, N7.40; Ecobank Transnational Incorporated, N15.50; Transcorp Hotels, N6.10; Ikeja Hotel, N1.67; DAAR Communications, 44 kobo and BOC Gases, which closed at a low of N4.21 per share.
Most insurance companies, the largest group of stocks at the Nigerian Stock Exchange (NSE), continued to struggle below or at their nominal values with the exception of AXA Mansard Insurance, NEM Insurance, Prestige Assurance, Continental Reinsurance and AIICO Insurance.
Several other stocks across the sectors are trading at around their 52-week lowest values including Dangote Sugar Refinery, International Breweries, Guinness Nigeria, Honeywell Flour Mills, Cadbury Nigeria, PZ Cussons Nigeria, Unilever Nigeria, Diamond Bank, Wema Bank, GlaxoSmithKline Consumer Nigeria, Berger Paints, Jaiz Bank, Oando, Red Star Express, University Press and United Bank for Africa among others.
Checks at the weekend indicated that some two-quarters of quoted companies are trading below or at their nominal values while about a quarter of the most active stocks are trading around or at their lowest prices.
The All Share Index (ASI)- Nigeria’s benchmark equities index, closed weekend at 31,678.70 points compared with 32,058.28 points recorded as index on board at the beginning of the week. Aggregate market value of all quoted equities on the NSE also dropped from its week’s opening value of N11.704 trillion to close the week at N11.565 trillion.
Nigerian equities had lost N109 billion in October, representing average month-on-month decline of 0.92 per cent. The ASI-the common value-based index that tracks share prices at the NSE, had declined to close October at 32,466.27 points, the opening index for November. Aggregate market value of all quoted equities also dropped to close October at N11.853 trillion, the value-on-board at the beginning of this month.
The ASI had opened 2018 at 38,243.19 points while aggregate market value of all quoted equities had opened at N13.609 trillion, representing average decline of 17.17 per cent and N2.04 trillion.
Most analysts remained cautious about the outlook at the stock market, with several stocks expected to dwindle further as the political parties square up for the final rush to the February 2019 elections.
“In the coming week, we expect an undulating trend in market performance as the impact of bargain hunting in fundamentally sound stocks is expected to be countered by subsequent sell offs. However, we maintain our bearish outlook on the market over the near-term,” Afrinvest Securities stated in a weekend preview of the equities market.
Analysts at Cordros Capital stated that the negative performance for the equities market will persist in the short term, amidst growing political concerns ahead 2019 elections, and absence of a positive market trigger.
“However, positive macroeconomic fundamentals remain supportive of recovery in the long term,” Cordros Capital stated.