Since Buhari’s Inauguration, Investors Have Lost N302.4 billion As Market Capitalisation Fell To N13.299 trillion

Hope that President Muhammadu Buhari’s inauguration on Wednesday would trigger positive sentiments at the Nigerian Stock Exchange (NSE) was dashed as the All Share Index closed Friday’s trading session in the red, down by 0.59 per cent.

At the close of transactions last week, analysts had warned investors to be cautious in trading of stocks and that came to the fore with Monday’s trading session resuming on a negative note.

Due to profit taking in the shares of MTNN, Dangote Cement and Union Bank of Nigeria (UBN), the All Share Index (ASI) declined by 2.2 per cent while investors lost N302.4 billion as market capitalisation fell to N13.299 trillion.

Tuesday’s session, a day to the President’s Inauguration, however, saw the market, the ASI rising by 3.7 per cent to 31,307.00 points, on the back of price appreciation in Dangote Cement, Zenith Bank and GT Bank while investors gained N489.9 billion in value as market capitalisation increased to N13.789 trillion.

Thursday’s session saw the bears return to the equities market as the ASI fell by 0.17 per cent to settle at 31,254.19 points following negative sentiments in the shares of Dangote Cement, GT Bank and ETI as no trading activity was recorded on Wednesday which was the day for inauguration of President Muhammadu Buhari.

Consequently, YTD loss settled at -0.6 per cent while market capitalisation decreased by N22.3 billion to close at N13.766 trillion.

Friday’s session was not any different as the benchmark index slipped further by 0.59 per cent to close at 31,069.37 points while market capitalisation closed the week at N13.684 trillion.

Market breadth turned negative as 23 stocks depreciated in value while 13 others appreciated. Oando topped the losers’ chart with 9.68 per cent to close at N4.20 per share as investors’ sentiment dropped in the stock after the Securities and Exchange Commission (SEC) concluded investigation of Oando Plc and directed among others the resignation of the affected Board members, and also barred the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando Plc from being directors of public companies for a period of five (5) years.

The Commission also directed the convening of an Extra-Ordinary General Meeting on or before July 1, 2019, to appoint new directors.

According to the SEC, “following the receipt of two petitions by the Commission in 2017, investigations were conducted into the activities of Oando Plc (a company listed on the Nigerian and Johannesburg Stock Exchanges).

“Certain infractions of securities and other relevant laws were observed. The Commission further engaged Deloitte & Touche to conduct a forensic audit of the activities of Oando Plc.

“The general public is hereby notified of the conclusion of the investigations of Oando Plc. The findings from the report revealed serious infractions such as false disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others”.

The SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected Board members to the company.

Champion was next with 8.18 per cent to close at N1.01, Wapco fell by 5.61 per cent to close at 5.61 per cent to close at N10.10, UBA declined by 5.30 per cent to close at N6.25 while Fidelity Bank dropped 4.55 per cent to close at N1.68.

On the flipside, Mansard topped the gainers’ chart with 10 per cent to close at N1.98 per share. LearnAfrica followed with a gain of 9.84 per cent to close at N1.34, CCNN increased by 7.14 per cent to close at N15, Dangote Flour grew by 5.31 per cent to close at N16.85 while Courtville garnered 4.35 per cent to close at 0.24 kobo.

UBA was top on the volume of shares sold with 43.96 million shares valued at N280.81 million. GT Bank transacted 25.63 million shares worth N814.28 million while Custodian sold 20.68 million shares valued at N130.21 million.

Overall, the volume and value of shares traded stood at 212.94 million units and N2.73 billion in 3,737 deals. Speaking to Sunday Sun, analysts continued to maintain that macroeconomic fundamentals remain supportive of recovery in the long term.

According to Cordros Capital, “our outlook for equities in the short to medium term remain conservative, amidst absence of a positive catalyst”.

A stockbroker who pleaded anonymity noted that the economy is yet to stabilise and hence it is affecting the capital market that mirrors the performance of an economy.

He also added that with the recent mandate by the industrial court that ordered the reinstatement of the suspended SEC DG, Mounir Gwarzo, the market is in for a zig-zag activity as investors especially foreign participation will decrease.

Justice Sanusi Kado, in his judgment, ordered the reinstatement of the claimant as the DG of SEC to complete his five-year tenure and further ordered that the claimant’s salaries, allowances and entitlements accrued should be paid to him in full while adding that Minister of Finance, named as the second defendant in the suit, lacked the power to suspend the claimant.

Analysts at Afrinvest said: “Following a bullish performance last week, we had expected sell-pressures this week as investors look to take profit on stocks that have recorded strong gains

“We, therefore, maintain a bearish outlook on the local bourse as investors continue profit-taking activities in bellwether stocks”.

 

Sunonline