Investors in the nation’s stock market lost a whopping N1.89tn last year amid instability in the market.
2018 began on a positive note as the Nigerian Stock Exchange All-Share Index recorded a nine per cent gain in the first quarter of the year, amid growing interest from foreign investors following the introduction of the Nigerian Autonomous Foreign Exchange Rate window in the second quarter of 2017.
In 2017, the ASI gained 42 per cent as it closed at 38,243.19 basis points, while the market capitalisation closed at N13.609tn.
The market capitalisation, however, depreciated by N1.89tn as it closed at N11.720tn in 2018, while the ASI shed 17.81 per cent during the year to close at 31,430.50 bps.
An analysis of the closing figures in 2017 and 2018 showed that the value of shares traded on the NSE shed N2.94bn, as it dropped from N6.89bn in December 2017 to N3.95bn in 2018.
Analysts say that the uncertainty that emerged in the market was driven by pre-election jitters and weak emerging market sentiment.
There were 31 gainers and 100 losers last year, which pegged the market breadth at 0.31x.
The volume of transaction grew by 17.27 per cent, while the value declined by 2.80 per cent.
Analysts at Meristem Securities Limited said the bearish performance of the equity market last year was due to negative investor sentiment ahead of the general elections this year and capital flow reversals, given higher interest rate in the United States.
They said, “This affected investors’ participation in the stock market and this was worsened by unimpressive earnings performance by companies on the bourse.”
CCNN emerges biggest gainer in 2018
The Cement Company of Northern Nigeria Plc was the top performer of the year, having gained 110 per cent.
The company’s share price, which opened the year at N9.50, closed at N19.95.
According to a statement on Monday, the company got a legal and regulatory approval to merge with Kalambaina Cement Company Limited.
This added N200bn to the NSE market capitalisation as 12 billion shares of the expanded entity were listed on the Exchange.
The market capitalisation of the company stood at N254.98bn as of December 31, 2018.
Lafarge becomes biggest loser
On the other hand, Lafarge Africa Plc ended the year with a loss of 72.27 per cent, as its share price closed at N12.45 from the N44.89 recorded at the beginning of the year.
An analysis of the company’s performance during the year showed that its share price hit its highest point in the year at N57.35 on February 1.
But the share price dropped to its lowest point in the year at N11.75 on December 20.
The company, which recorded a loss after tax of N34.6bn in 2017, traded a total of 672,115 shares valued at N8.419m on the NSE in 2018.
Its market capitalisation stood at N107.984bn on December 31, 2018, while its outstanding shares stood at 8.673 billion.
Okomu Oil, sole gainer in agric sector
The agricultural sector settled higher in the year, with 0.13 per cent year-on-year gain.
There was one gainer and three losers in the sector.
Okomu Oil Palm Plc was the sole gainer in the sector in 2018, having gained 12.57 per cent to close the year at N76.20 per share.
FTN Cocoa Processors Plc, on the other hand, was the worst-performing stock in the sector, having lost 60 per cent of its price to close at 20 kobo.
Unity Bank leads banking sector
Market tensions and political uncertainties weighed on the banking sector’s performance, as it declined by 10.54 per cent.
Tier 2 bank stocks led the gainers’ chart in the sector.
Unity Bank Plc emerged as the top-performing stock with a share price increase of 84.91 per cent to close at 98 kobo.
Other gainers were Sterling Bank Plc, Skye Bank Plc (now defunct), Diamond Bank Plc and First City Monument Bank Plc, which gained 71.30 per cent, 54 per cent, 32.67 per cent and 31.08 per cent, respectively.
On the flip side, Access Bank Plc, United Bank for Africa Plc, Jaiz Bank Plc and Fidelity Bank Plc were the sector’s top decliners with respective losses of 34.93 per cent, 28.21 per cent, 23.79 per cent, 19.05 per cent and 18.70 per cent.
Vitafoam emerges sole gainer in consumer goods sector
Vitafoam Nigeria Plc was the only gainer last year, with a share price increase of 33.33 per cent to close at N4.
The consumer goods sector started the year on a good note on the back of bullish investor sentiments, but it closed in the red zone at the end of the year.
The year-to-date return stood at -24.35 per cent, as the sector breadth for the year stood at 0.06x, reflecting one gainer and 17 losers.
On the other hand, DN Tyre and Rubber Plc shed 60 per cent of its share price to top the losers’ chart, closing at 20 kobo.
Analysts at Afrinvest Securities Limited said, “We see three major drivers for the Nigerian equity market this year: the local political landscape, global sentiment towards emerging markets, and domestic macro-economic fundamentals.
“On the political front, we anticipate a rocky start to trading in the equity market as elections draw near. Historically, the periods before major elections in Nigeria have been characterised by a ‘steer clear and monitor’ approach by foreign investors and local investors.
“We expect currency pressure to persist through the year and forecast only modest economic performance (2019 Gross Domestic Product growth: 2.7 per cent year-on-year) and do not expect macroeconomic developments to provide much market joy in 2019.
“Coupled with our expectation of adverse external conditions in 2019, we anticipate modest post-election equity market performance and project a market return between -5 per cent and five per cent, with a point estimate of 2.5 per cent.” (PUNCH)