Nigerian equities continued on the downtrend for the third consecutive trading session yesterday at the Nigerian Stock Exchange (NSE) as profit-taking transactions shaved off N122 billion from market values of quoted shares.
Despite global equities recovery, underlying profit-taking trend continued to dominate transactions at the stock market, after Nigerian equities hit a high of N16 trillion last weekend. Most analysts expected the market to regain its rally as the sustained depreciation continues to throw up attractive valuations.
With more than two losers for every gainer, benchmark indices at the NSE indicated a day-on-day decline of 0.77 per cent yesterday, equivalent to net capital loss of N122 billion. This brought the total capital loss for the three consecutive trading sessions to N395 billion. Average year-to-date return also trended downward to 13.85 per cent at the end of the five-hour trading session yesterday.
“Against the backdrop of sustained profit taking since the start of the week, we expect performance in subsequent trading sessions to remain negative. However, in light of lower pricing on fundamentally sound stocks we also anticipate more activity in the coming week as investors seek bargain opportunities,” Afrinvest Securities-a Lagos-based dealer at the NSE stated.
The All Share Index (ASI)-the benchmark index that tracks share prices at the Exchange, declined to 43,538.16 points from its opening index of 43,877.30 points. Aggregate market value of all quoted equities also dropped from its opening value of N15.746 trillion to close at N15.624 trillion.
All sectoral indices also closed negative with the exception of the NSE Banking Index, which rose by 0.6 per cent. The NSE Industrial Goods Index declined by 1.1 per cent. The NSE Insurance Index and NSE Oil & Gas Index dropped by 0.8 per cent each while the NSE Consumer Goods Index declined by 0.3 per cent.
United States (U.S.) shares gained in early trade yesterday, but continued to fluctuate as investors digested several frantic days of trading.
The Dow Jones and S&P 500 rose about 0.5%, while the Nasdaq edged up 0.1%.
The rise extended Tuesday’s gains and followed volatile trading, triggered in part by concern over the prospect of higher interest rates.
European stock markets also recovered ground on Wednesday, but a rally in Asia faded.