Stock market defies analysts projection, closes in red

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Stock market defies analysts projection, closes in red
New dividend policy shocks banks as Stock market defies analysts projection, closes in red

The equities market defied analysts expectation of a rebound this week to close in red after recording four days of consistent losses.

Investment analysts and stockbrokers had said that the market would take a positive turn this week after two consecutive weeks of losses despite impressive corporate earning reports and accompanying dividend payment that have been released by the companies in recent weeks.

Consequently, the market went down by over N20 billion at the end of trading activities fuelled by massive sell-off in small cap stocks.

A breakdown showed that the equities capitalisation (market value of stocks) dropped to N14.982 trillion at the end of trading on Friday from N15.002 trillion last week.

Similarly, the All Share Index, ASI dipped further by 1.11 percent to 41,472.10 points, moderating the month-to-date and year-to-date returns to -4.29 percent and 8.44 percent respectively.

Stock Market

However, the downward move followed a global trend where major markets around the world ended the week in the negative.

Specifically, Asian stocks (CSI 300) slipped by 3.73 percent; Nikkei 225, which took the biggest hit, went down by 4.88 percent, followed by U.S. shares (DJIA: -3.96 percent; S&P 500: -3.94 percent) and European equities (FTSE 100: -3.22 percent; Euro Stoxx 50: -3.60 percent).

Similarly, the Morgan Stanley Capital International Emerging Market Index (MSCI EM) recorded 1.35 percent index decline, pressured by sell-offs in China and Brazil (-0.71 percent), while renewed interests in Ghana (+1.89 percent) and still-positive sentiments in Kenya (+4.12 percent) were not sufficient to lift the MSCI FM index, which dipped by 0.42 percent owing to continued weaknesses in Nigeria (-1.11 percent) and other countries in the region.

According to analysts at Cordros Capital, the retreat in risky assets’ prices was driven by intensified trade war fears, monetary policy decision, geo-political issues, and tech sell-offs triggered by the Facebook data-use breach.

Further analysis of the week’s trading showed that 49 equities depreciated in price compared to 33 equities that appreciated in price. The prices of 89 equities remained unchanged at the end of the week.

FTN Cocoa Processors Plc and Unitykapital Assurance Plc led the losers, dropping by 21.43 percent to close at N0.22 from N0.28 per share each.

Niger Insurance Plc ranked third, dropping by 16.67 percent to close at N0.35 from N0.42; Multiverse Mining and Exploration Plc dipped by 16 percent to close at N0.21, while Cadbury Nigeria Plc fell by 14.91 percent to close at N14.55 from N17.10 per share.