The Nigerian Stock Exchange (NSE) All-Share Index hit a 52-week low yesterday, falling by 1.53 per cent to close at 29,162.24, while market capitalisation shed N170 billion to close at N10.953 trillion.
The bearish trend has persisted as investors continued to ignore corporate results and dividend announcements by companies, leading to a decline of 4.6 per cent last week. It was expected that some investors may come in for bargain hunting following the low valuation of most stocks.
The week opened on bearish note as 29 stocks depreciated, compared with only 13 that appreciated. Losses by Dangote Cement Plc, Stanbic IBTC Holdings Plc and Guaranty Trust Bank Plc contributed to the negative close of the market.
Market analysts at Cordros Capital said in the absence of a positive catalyst, investors should trade cautiously in the short term.
“However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term,” they said.
Fidson Healthcare Plc led the price losers with 10 per cent, trailed by Tripple Gee and Company Plc with 9.0 per cent. Fidson Healthcare is currently in the market shopping for additional capital of N3 billion to enhance its operations. The capital raise, which is through rights Issue, is expected to help reduce the company’s cost of finance, which affected its performance in 2018 financial year.
According to the company, about 60 per cent of the net proceeds of the issue would be applied towards taking out expensive short-term debts, thereby reducing finance cost by about 50 per cent on an annualised basis going forward.
The company also intends to take advantage of the fund raise to inject fresh working capital into the business in order to maximize the opportunities that exist in the market.
Although the NSE ASI declined yesterday, activity level increased as volume and value traded rose 13.4 per cent and 50.6 per cent to 454.7 million units and N5.3 billion respectively. Sterling Bank Plc (93.4 million shares), Guaranty Trust Bank Plc (78.3 million shares) and Tripple Gee (60.0 million shares) were the top trades by volume while GTBank (N2.7 billion), Zenith Bank (N540.7 million) and Double One (N327. million) led the top trades by value.
In terms of sectoral performance, three of the five tracked sectors fell. The NSE Banking Index led with 2.5 per cent, trailed by the NSE Industrial Goods Index, which shed 0.9 per cent. The NSE Consumer Goods Index went down by 0.4 per cent.