…As Capital market operators task CBN to boost FPI with stable exchange rate***
Trading on the Nigerian equities market nosedive further on Tuesday with a decline of 0.32 per cent and a loss of N44 billion, due to price depreciation on some highly capitalised stocks.
Specifically, the All Share Index decreased by 89.08 points or 0.32 per cent to close at 27,602.77 compared with 27,691.85 achieved on Monday.
Subsequently, the market capitalisation which opened at N13.472 trillion shed N44 billion to close at N13.428 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Seplat Petroleum Development Company (Seplat), Total Nigeria, Dangote Cement, Guaranty Trust Bank and International Breweries.
Analysts at Afrinvest Limited expected the bearish performance to continue as investor sentiment remains weak.
Analysts at APT Securities and Funds Limited said: “We are optimistic that positive sentiment will rally as the market is set for a rebound in anticipation of economic policies.”
Market breadth remained negative with 13 gainers compared with 23 losers.
Seplat for the second consecutive day led the losers’ chart by 9.82 per cent to close at N397.70, per share.
Neimeth International Pharmaceuticals followed with a decline of 9.62 per cent to close at 47k, while NPF Micro Finance Bank lost 9.52 per cent to close at N1.14 per share.
Ecobank Transnational Incorporated (ETI) depreciated by 9.15 per cent to close at N6.95, while Sovereign Trust Insurance and Trans Nationwide Express declined by 9.09 per cent each to close at 20k and 70k, respectively, per share.
Conversely, PZ Cussons recorded the highest price gain of 5.93 per cent to lead the gainers’ chart to close at N6.25.
Courteville Business Solutions came second with a gain of five per cent to close at 21k per share.
Cement Company Northern Nigeria and Chams went up by 3.57 per cent each to close at N14.50 and 29k, respectively, while Wema Bank appreciated by 3.45 per cent to close at 60k per share.
Transcorp topped the activity chart with an exchange of 29.67 million shares valued at N31.70 million.
Guaranty Trust Bank trailed with 25.17 million shares worth N692.25 million, while Access Bank accounted for 19.20 million shares valued at N128.52 million.
MTN Nigeria sold 17.02 million shares worth N2.35 billion, while FBN Holdings traded 15.63 million shares valued at N78.05 million.
In all, total volume traded appreciated by 16.04 per cent with a total of 183.65 million shares worth N4.50 billion traded in 3,558 deals.
This was in contrast with a turnover of 158.27 million shares valued at N2.3 billion exchanged in 3,595 deals on Monday.
Meanwhile, Some capital market operators on Tuesday urged the Central Bank of Nigeria (CBN) to ensure stable exchange rate to boost Foreign Portfolio Investments (FPIs) into the Nigerian capital market.
They made the call in Lagos, while reacting to the persistent decline in total transactions by foreign portfolio investors at the Nigeria Stock Exchange (NSE).
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Limited, said the apex bank needed to ensure stable foreign exchange and friendly economic policies to boost Foreign Direct Investment (FDIs).
Kurfi said foreign investors were more concerned at country’s foreign exchange risks rather than capital gain or price appreciation.
“The Central Bank of Nigeria (CBN) needs to ensure stability of the exchange rate and encourage forward contract option for those who want to hedge against exchange risks,’’ he said.
Kurfi noted that it would be difficult to boost FDIs with the price of crude oil going below the 2019 budget benchmark.
He said the country needed strong foreign reserves to attract FDIs, noting that diversification of the nation’s revenue was very paramount.
Mr Sola Oni, a Chartered Stockbroker and Chief Executive Officer, Sofunix Investment and Communications, said Nigeria would be an attractive investment destination for FPI in an enabling environment.
“FPIs do country risk analysis before they invest their hot money anywhere.
“They are also ready to move out their investment at the click of a button.
“They want an environment where there is stability in all spheres of human endeavours,’’ Oni said.
He noted that foreign investors needed macroeconomic, political, religious and social stability to invest in any country.
The total transactions by FPIs in the nation’s bourse dropped by 36.53 per cent in seven months, with foreign portfolio outflows outpacing inflows.
Foreign and domestic portfolio transactions in the past seven months obtained from the exchange showed that total foreign transactions dropped to N530.57 billion by July as against N835. 89 billion achieved in the corresponding period of 2018.
Also, foreign inflows decreased by 39.24 per cent to N24.3.35 billion by July against a drop to N157. 13 billion posted in the comparative period of 2018.
Similarly, foreign outflows dropped to N287. 22 billion compared with N435. 41 billion recorded in 2018.