Stock market investors have lost over N2.3 trillion barely three weeks after the first case of coronavirus, which is currently ravaging the whole world, was confirmed in Nigeria on January 28, 2020.
Specifically, market capitalisation of listed equities, which stood at N13.657 trillion as at Friday, February 28, 2020 depreciated by N2.349 trillion to N11.308 trillion yesterday, while the All-share index which measures the performance of quoted companies closed at 21,700.98 from 26,216.46 representing 4,515.48 points or 20.8 per cent drop.
Nigeria has recorded fewer confirmed cases of Covid-19, when compared to other countries, but the global pandemic’s impact on the economy is far more significant.
While global oil demand drops drastically in the wake of the outbreak, Nigeria’s economy is being caught in the crosshairs.
Essentially, with oil being Nigeria’s biggest export; the government relies heavily on the resource for dollar earnings to fund its national budget.
More so, Central Bank of Nigeria (CBN) last week Friday officially devalued the Naira to N380 to a dollar. All these, coupled with other perennial issues bedevilling the nation’s capital market hitherto have eroded investors’ confidence in the market.
Recall that the equities market defied New Year trends as the performance indices of the market (the All-share index and market capitalisation) rose significantly for one week, from January 2, 2020, the first trading day of the year.
The rally caused the value of listed equities to increase by over N816 billion or 5.9 per cent within five days, while cumulative value of listed equities rose to N13.787 trillion as at January 8, 2020 from N12.971 trillion at the beginning of the year.
Analysts argued that with the continuous spread of the Covid-19 across the world as well as the fast declining crude oil prices, Nigerian equities market would remain pressured in the short term despite the attractiveness of some blue-chip stocks.
Analysts at Afrinvest predict gloomy outlook this week in the absence of any major market catalyst to stimulate investors’ appetite towards the equities market.
“The local bourse recorded another negative WoW performance as overhanging uncertainties in the global and domestic spaces continue to weaken investors confidence.
”Going into next week, we expect the market to continue to react to events in the crude oil market as well as news surrounding the Coronavirus.”
Codros Capital Limited said: ”Looking ahead, we still see sizeable legroom for further downslide in risk assets as investors continue to run towards safety in the face of the fast-spreading coronavirus pandemic and the rout across global markets.
Meanwhile, losses recorded in medium and large capitalised stocks, especially Nigerian Breweries, Stanbic IBTC Holdings, Guaranty Trust Bank, Zenith Bank and Unilever Nigeria depressed the indices further as at closed of trading yesterday.
Market breadth closed negative, with nine gainers versus 25 losers. Neimeth International Pharmaceuticals recorded the highest price gain of 10 per cent, to close at 44 kobo, per share.
May and Baker Nigeria followed with a gain 8.94 per cent to close at N1.95, while Custodian Investment rose by 8.65 per cent, to close N5.65, per share.
Flour Mill of Nigeria went up by 7.77 per cent to close at N20.80, while Chemical and Allied Products (CAP) rose by 7.69 per cent to close at N21.00, per share.
On the other hand, Dangote Sugar Refinery, Nigerian Breweries, Stanbic IBTC Holdings, United Bank for Africa (UBA) and Wema Bank led the losers’ chart by 10 per cent each, to close at N9.00, N27.00, N23.85, N4.50 and 45 kobo, respectively per share.
United Capital followed with a decline of 9.96 per cent to close at N2.17, while Guaranty Trust Bank fell by 9.95 per cent to close at N16.75, per share.
Lafarge Africa went down by 9.90 to close at N9.10, while Unilever Nigeria shed 9.87 per cent, to close at N10.50, per share.
However, the total volume of trades rose by 22.4 per cent to 464.36 million units, valued at N3.87 billion and exchanged in 5,883 deals. Transactions in the shares of Zenith Bank topped the activity chart with 120.46 million shares valued at N1.30 billion.
Guaranty Trust Bank followed with 63.27 million shares worth N1.06 billion, while FBN Holdings traded 46.68 million shares valued at N176.06 million.
Access Bank traded 31.009 million shares valued at N173.18 million, while UBA transacted 29.16 million shares worth N136.02 million.