Stock Market Rout Deepens As Investors Lose N9tn In Three Weeks | Daily Report Nigeria
Nigerian equities shed about N9 trillion in value within the first three weeks of June. Market capitalisation dropped by N5. 69 trillion in one week, reversing May’s gains. Analysts link the decline to. . .
Nigerian equities shed about N9 trillion in value within the first three weeks of June. Market capitalisation dropped by N5. 69 trillion in one week, reversing May’s gains. Analysts link the decline to profit-taking, dividend markdowns and portfolio rebalancing. Nigeria’s stock market continued its downward slide in June, with investors losing an estimated N9 trillion in market value within the first three weeks of the month as selling pressure intensified across major equities. Fresh data from the Nigerian Exchange (NGX) showed that the All-Share Index (ASI) fell by 3. 59 per cent during the week, closing at 235,941. 27 points, while market capitalisation declined to N151. 33 trillion. ATTENTION:Click“HERE”to join our WhatsApp group and receive News updates directly onyour WhatsApp!The latest downturn wiped off N5. 69 trillion in investor wealth in just one week, effectively erasing the N4. 59 trillion gain recorded in May. Market records indicate that capitalisation rose from N155. 99 trillion at the end of April to N160. 59 trillion by the close of May. However, persistent bearish trading in June has pushed the market value down significantly, resulting in a month-to-date decline of 5. 77 per cent. READ ALSO:Stock Market Sustains Rally, Records ₦33. 3bn TurnoverDespite the correction, the market has still delivered a year-to-date return of 51. 62 per cent, although this is below the peak performance of over 60 per cent recorded in May. Trading activity reflected the weak sentiment, with only 11 stocks posting gains during the week compared to 40 in the previous week. Meanwhile, 78 equities recorded losses, while 57 stocks closed flat. Among the major laggards were First HoldCo and GTCO, whose share prices declined by 20. 2 per cent and 15 per cent respectively. Market analysts attributed the sustained decline to widespread profit-taking following months of strong gains that saw several stocks deliver triple-digit returns. Investors are also reacting to dividend markdowns by listed companies that recently traded ex-dividend. Companies affected by dividend-related price adjustments include UACN, Eterna Plc, FCMB Group, Airtel Africa, Dangote Cement and Champions Breweries. Other firms such as Seplat Energy, Julius Berger, Chemical and Allied Products (CAP), BUA Foods and Jaiz Bank have also experienced similar adjustments. Analysts further noted that institutional investors are rebalancing portfolios ahead of the second half of the year, with some shifting funds into fixed-income instruments where yields remain attractive. Demand for government securities has remained strong, with subscriptions at the latest one-year Treasury Bills auction exceeding N1. 86 trillion as investors sought to take advantage of the 17. 34 per cent yield. Market watchers also pointed to the ongoing private placement by Dangote Refinery as another factor influencing liquidity. According to industry sources, bids worth more than $5 billion have already been received, prompting some investors to liquidate equity positions to raise funds for participation. The severity of the correction was highlighted by Friday’s trading session alone, which saw market capitalisation decline by N938. 75 billion. Meanwhile, the NGX has introduced new trading rules requiring stocks to meet specified volume thresholds before price movements can occur. Analysts believe the framework could influence future price discovery and market valuations as investors adjust to the new system. For publication of Press Releases, Statements, and Advert Inquiries, send an email to[email protected]