By Omobayo Azeez
Nigerian capital market remained burdened by negative sentiments and dwindling confidence which again pushed the equities market to shed N279 billion at the close of another weekly trading on Friday.
According to analysts, the situation in the market has been as a reflection of the local and international macroeconomic environments, especially in view of Coronavirus (Covid-19) pandemic and oil prices crisis in the global market.
At the close of the week, the benchmark index that tracks share prices at the Nigerian Stock Exchange (NSE) plunged by 534.92 points or lost by 2.35 per cent to close at 22,198.43 basis points.
The value of shares at the market also suffered the same fate by losing N279 billion to close at N11.568 trillion, lower than N11.847 trillion it opened the week.
Speaking on the market situation during the week, Oscar Onyema, the chief executive officer of the NSE said that management of the NSE was working to restore confidence in the market.
Similarly, Sen. Ibikunle Amosun, chairman, House Committee on Capital Market, charged management of the course to play a significant role in the process of diversifying the nation’s economy, calling attention to sectors that would enhance greater participation of Nigerians in the economy.
Specifically, he said as he led the committee to the NSE that the real sector must be energized to do more for the people, adding that even micro, medium and small-scale enterprises (MSMEs) should be those feeding the conglomerates.
Despite that the exchange has designed various segments to accommodate diversified investment interests and improve the economy; the situation at hand has exposed investments to acute volatility.
According to data obtained from the NSE, year-to-date returns on equities investments at the close of the week stood in the red zone at -17.30 per cent.
Within the week also, aside from the NSE that plunged by -2.35 per cent, all other indices finished lower with the exception of NSE banking, NSE insurance and NSE oil and gas which appreciated by 0.29 per cent, 2.80 per cent and 0.22 per cent while NSE ASeM index closed flat.
According to Ambrose Omordion, chief research officer at Investdata Consulting limited, going forward, the market is expected to pose mixed performance on low price attraction with investors and traders review the impact of economic measures of the government and its economic managers, even as high dividend yields continue to attract buying interests for investors that want to make 100 per cent returns in 24 months
“This is possible if you stick to good stocks by ordering a review of the 10 golden stocks; while more audited corporate earnings hit the market going forward.
“This is despite the likely continuation of the mixed movement in the midst of selloffs, with investors buying increased positions in undervalued stocks ahead of dividend declaration.
“This is also against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market, high inflation and unstable economic outlook for 2020,” he said.
During the week, a total turnover of 2.804 billion shares worth N32.559 billion in 31,715 deals were traded investors on the floor of the exchange, in contrast to a total of 3.964 billion shares valued at N43.703 billion that exchanged hands the previous week.
The financial services industry, measured by volume, led the activity chart with 2.508 billion shares valued at N25.292 billion traded in 23,243 deals; thus contributing 89.44 per cent and 77.68 per cent to the total equity turnover volume and value respectively.
The conglomerates followed with 60.873 million shares worth N105.948 million in 767 deals, while the third place was services industry, with a turnover of 51.296 million shares worth N117.545 million in 350 deals.
In terms of volume, trading in the top three equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc accounted for 1.635 billion shares worth N21.282 billion in 15,631 deals, contributing 58.32 per cent and 65.37 per cent to the total equity turnover volume and value respectively.