Offshore investors exit Nigerian assets as stocks fall to lowest level

  • As investors lose N299b in 2 days

The Nigerian Stock Exchange (NSE) market capitalisation on Friday closed negatively, for the fifth day, dipping further by N145 billion and recording a loss of N299 billion in two days.

On Thursday, the exchange had pared its stock value by N154 billion, with market capitalization closing at N14.389 trillion.

The free fall continued on Friday, with the market capitalisation shedding N145 billion or 1.01 per cent to close lower at N14.244 trillion.

The index which fell for the seventh straight session, recovered some ground but closed down 1 percent. Stocks had fallen 1.28 percent in late trades, sliding to 39,213 points, a level not seen since January.

Offshore investors have been exiting local assets as yields on Nigeria’s treasuries have fallen to around 12 percent from as high as 18 percent a year ago due to government action to lower borrowing costs and U.S. interest rate rises.
Similarly, the All-Share Index which opened at 39,723.85 lost 400.23 points or 1.01 per cent to close at 39,323.62 following pride loses.

A breakdown of the price movement table shows that Guinness topped the losers’ chart for the day, shedding N4 to close at N100 per share.
Flour Mills Nigeria trailed with a loss of N1.50 to close at N49, Julius Berger was down by N1.45 to close at N27.55 per share, while Glaxosmithkline depreciated by N1.02 to close at N20.50 per share.

Commenting on the persistent market drop, Mr Ambrose Omordion , the Chief Operating Officer, InvestData Ltd, attributed the development to the exit of foreign portfolio investors.

Omordion said foreign portfolio investors were offloading and running for safety as “political risks” surrounding the 2019 general elections were beginning to play out.

He said investors at the moment had two options of investing for long-term or to sell down in order to cut the huge losses to invest back when eventually the market rebounded.

On the other hand, MRS led the gainers’ table, gaining N1.70 to close at N36.05 per share.
UACN followed with a gain of 55k to close at N15.05, while Fidson Healthcare gained 25k to close at N5.95 per share.

Ikeja Hotel added 23k to close at N2.58, while Sterling Bank increased by 6k to close at N1. 35 per share.

On a bright note, FCMB group recorded the highest volume of activities during the day, trading 44.016 million shares worth N98.29 million.

The financial service sector remained the most active with Zenith International Bank emerging the toast of investors, accounting for 22.21 million shares valued at N590.59 million.

United Bank for Africa sold 21.43 million shares worth N228.17 million, while Regency Alliance Insurance traded 20.81 million shares valued at N5.41 million.

FBN Holdings trailed with an exchange 19.99 million shares worth N194.09 million.
In all, investors bought and sold 295.99 million shares valued at N2.95 billion achieved in 4,911 deals against the 256.43 million shares worth N2 billion transacted in 4,111 deals on Thursday.

Traders expect the bear market to continue, even as the capital flight has also put the local naira currency under pressure.

Stocks fell widely on Friday with 41 companies declining and 12 firms advancing. Julius Berger and Transcorp each shed 5 percent while Fidelity Bank fell 7.7 percent.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.