Weak investor sentiment sends stock market YTD down –12%

Weak investor sentiment sends stock market YTD down –12%

Chinwendu Obienyi

Significant sell-offs in the shares of Presco, Dangote Cement and Access Bank, Nigeria’s stock market index marginally impacted the All Share Index (ASI) as it shed 0.15 per cent to settle at 27,657.27 points.

As a result, YTD performance worsened to -12.0 per cent, while market capitalisation fell by N20 billion to N13.463 trillion at the close of proceedings yesterday. This was in contrast to the  -11.9 per cent and N13.483 trillion recorded on Friday.

Similarly, activity level declined as volume and value traded fell by 38.2 and 85.0 per cent to 109.56 million units and N888.2 million respectively, in 3,382 deals.

Reacting to developments in the market, analysts at Afrinvest said, “bearish sentiment is expected to continue as there are no major catalysts to boost investor confidence, although we note that there is room for bargain hunting”.

Similarly, analysts at Cordros Capital in a note to Daily Sun, said, “we expect the market to remain pressured given global risk-off sentiments and weak domestic participation.

Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury bills. Hence, we advise that long-term investors consider appropriately timed investments”.

The most active stocks by volume at the trading include FBN Holdings (20.3 million units), Transcorp (9.8 million units) and Access Bank (9.7 million units) while FBN Holdings (N114.3 million), Dangote Cement (N102.9 million) and Zenith Bank (N84.5 million) led by value. At the sound of the closing gong, Presco led 23 others on the losers’ chart with 9.93 per cent to close at N40.35 per share.

Meanwhile, FMDQ Securities Exchange Plc  has announced the operationalisation of its wholly owned central securities depository (CSD), FMDQ Depository Limited.

The incorporation of this important market infrastructure, in December 2018, and its registration by the Securities and Exchange Commission (SEC) last June, follows the operationalisation of FMDQ Clear Limited – Nigeria’s first central clearing house, in January 2018; completing the value chain of pertinent market infrastructure for the pre-trade, trade and post-trade spectrums provided by FMDQ – from listing to trading, clearing, settlement and data among other services.

In a statement obtained from the Exchange’s website, the securities exchange company explained that an effective and fully developed securities depository system is essential for maintaining and enhancing market efficiency, which is one of the core characteristics of a mature capital market, and the depository and attendant custodial service, is one of the key ingredients of developed global markets.

The post Weak investor sentiment sends stock market YTD down –12% appeared first on The Sun Nigeria.

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