Equity market sheds N438bn in volatile trading week

In a turbulent week for the Nigerian stock market, the All-Share Index and market capitalisation experienced a downturn, depreciating by 0.46 per cent and 0.19 per cent, respectively. This decline resulted in the market closing at 97,745.73 points and N55.50tn, respectively, marking a loss of N438bn.

During the week, investors traded a total of 3.39 billion shares worth N52.30bn in 44,814 transactions. This was a decrease from the previous week when 3.56 billion shares valued at N47.22bn were exchanged hands in 42,871 deals.

The financial services industry led the activity chart by volume, with 2.875 billion shares worth N36.99bn traded in 23,791 transactions. This accounted for 84.73 per cent of the total value and 70.73 per cent of the overall equity turnover volume.

The Oil and Gas Sector followed with 141.93 million shares valued at N6.69bn exchanged in 4,476 transactions, while the Consumer Products Sector took third place with 97.31 million shares valued at N4.05bn traded in 4,179 transactions.

Fidelity Bank Plc, United Bank for Africa Plc, and Zenith Bank Plc were the top three traded stocks by volume, contributing significantly to market activity. These companies accounted for 2.099 billion shares valued at N28.22bn across 7,603 deals, representing 61.87 per cent of the total equity turnover volume and 53.94 per cent of the value.

There was a change in stock price movements this week, with the number of stocks experiencing price increases, rising to 40 from 20 the previous week.

Conversely, the number of stocks that saw price declines decreased to 40 from 47, while 71 stocks maintained their prices compared to 84 last week.

In a related development, trading in Zenith Bank Plc rights issue of 5,232,748,964 ordinary shares of 50 Kobo each commenced during the week. Priced at N36.00 per share, the rights issue offers one new ordinary share for every six existing ordinary shares held as of July 24.

Commenting on the trend, a financial analyst, Ambrose Omorodion, noted that the recent downturn was influenced by a rate hike following the Monetary Policy Committee meeting, amidst a backdrop of persistent economic weakness in Nigeria.

He remarked, “Historically, August has been a challenging month for the Nigerian capital market, often performing poorly over the past 18 years. However, with stronger corporate earnings, investors might witness a pullback in market performance this month.”