…As Onyema says COVID-19 pandemic caused Domestic investors to account for 60% transactions***
Traders in the domestic bourse lost N63 billion on Wednesday as indices closed lower, dropping 0.47 per cent, amid profit-taking in some heavyweight stocks.
Specifically, the market capitalization, which opened at N13.216 trillion, shed N63 billion to close at N13.153 trillion; just as the All-Share Index lost 120.11 points or 0.47 per cent to close at 25,215.04, compared with 25,335.15 posted on Tuesday.
Accordingly, the Month-to-Date returned negative at -0.2 per cent, while the Year-to-Date loss increased to -6.1 per cent.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are: BUA Cement, UACN, CI Leasing, Guinness and Zenith Bank.
Analysts at Afrinvest Ltd., said, “We expect profit-taking activities to drag the performance of the equities market for the rest of the week.”
Consequently, the market breadth closed the same proportion with 19 gainers and 19 losers.
C & I Leasing led the laggards’ chart in percentage terms, declining by 9.43 per cent, to close at N4.80, per share.
UACN came second with 9.09 per cent to close at N7.50, while Japaul Oil lost eight per cent to close at 23k, per share.
Red Star Express dropped 7.30 per cent to close at N3.30, while Cutix shed 5.33 per cent to close at N1.60, per share.
Conversely, Berger Paints and Prestige Assurance dominated the gainers’ table in percentage terms, gaining 10 per cent each to close at N7.70 and 77k per share, respectively.
Neimeth trailed with 9.86 per cent to close at N5.80, while Mutual Benefits Assurance and Royal Exchange rose by 9.09 per cent each to close at 24k per share each.
UPDC Real Estate Investment Trust garnered 8.57 per cent to close at N3.80, while Cornerstone Insurance rose by eight per cent to close at 54k, per share.
The total volume of transacted decreased marginally by 0.8 per cent with an exchange of 266.65 million shares, valued at N3.18 billion achieved in 3,978 deals.
Transactions in the shares of Guaranty Trust Bank topped the activity chart with 69.41 million shares valued at N1.68 billion.
Mutual Benefits Assurance followed with 51.76 million shares worth N12.39 million, while FBN Holdings accounted for 31.21 million shares valued at N167.67 million.
Japaul Oil sold 18.74 million shares worth N4.31 million, while Zenith Bank transacted 16.44 million shares worth N274.86 million.
In the meantime, the Nigerian Stock Exchange (NSE) says low yield environment caused by Coronavirus pandemic has positioned the equity market with domestic investors accounting for 60 per cent of market transactions.
Mr Oscar Onyema, NSE Chief Executive Officer, gave the submission on Wednesday at webinar organised by the Exchange with the theme: `Capital Markets in a Pandemic’.
Onyema said low yield environment had positioned the equity markets as a credible alternative for domestic institutional and retail investors.
He said that domestic investors had risen to the occasion in sustaining the equities market performance, accounting for about 60 per cent of trading activity.
“Surprisingly, domestic investors have risen to the occasion in sustaining the equities market performance.
“This year, domestic investors have accounted for almost 60 per cent of the trading activity compared to an average of 51 per cent in the past four years.
“Despite these economic headwinds, the NSE All-Share Index has returned month on month gains of 8.1 per cent and 9.8 per cent at the end of April and May, respectively,” Onyema said.
He explained that the pandemic had resulted in a decline in oil export earnings – which accounts for over 80 per cent of Nigeria’s export earnings – and remittances by Nigerians in the diaspora.
“Concurrently, foreign portfolio investor flight to safety has further intensified pressures on the nation’s foreign reserves and exchange rate,” Onyema said.
He said that liquidity in the foreign exchange window accessible to investors was also affected.
The CEO stressed the need for collaboration among exchanges, governments as well as use of technologies to remain resilient in the face of COVID-19 pandemic.
According to him, the pandemic has changed the way and manner things used to be before.
“Technology has long been a fundamental building block for growth in capital markets.
Today, digitisation and advanced analytics offer tremendous new potential.
“The capital markets industry, today, finds itself in a transitional period where it can adapt to digital trends and technologies as well as innovate with new business models and products/services.
“At the NSE, we see asset digitalisation beginning to create a whole new user experience.
“The Exchange has continued to leverage on its cutting-edge technology and various innovative platforms to ensure continued trading and listing activities on its bourse,” Onyema said.
Also speaking, Nandini Sukumar, Chief Executive Officer, World Federation of Exchanges, said capital market investment would be safe with stakeholders’ collective efforts.
Sukumar said exchanges would continue to ensure fair and orderly market even in the time of distress and international shocks.
“Stock exchanges exist to provide robust market structures that support issuers and investors, and we have seen this resilience amidst the COVID-19 pandemic.
“This resilience has not been an accident. Rather, we are seeing the result of a wide range of resources.
Global exchanges have invested over a decade to prepare for a crisis such as this,” she said.
Mr Nikil Rathi, Chief Executive Officer, London Stock Exchange, said the pandemic would change investors’ way of investment.
“We anticipate a change in the nature of investing. We have seen an increased focus on Environment, Social and Corporate governance (ESG) across asset classes, and this push is coming from investors who want to see the impact of their investments,” Rathi said.
Mr Robert Scharfe, Chief Executive Officer, Luxembourg Stock Exchange (LuxSE), assured investors of functional effective markets to curtail volatility.
Scharfe said over $20 billion social and sustainability bonds earmarked COVID-19 had been listed on LuxSE over the past three months.
According to him, there is a strong appetite from investors for such kinds of bonds in recent time.
Otunba Abimbola Ogunbanjo, NSE Council President, said the Exchange designed the webinar to provide a platform for discussions that would lead global exchanges to bolster ecosystem resilience.
Ogunbanjo said the webinar deliberations “have addressed critical issues around the vulnerability and unique opportunities that the COVID-19 pandemic has created and how they are being – and will continue to be – addressed.”
“It is my sincere hope that we will continue to sustain these conversations around business innovation and partnerships even as countries gradually reopen and economies resume their activities.
“Today, we have highlighted some of the steps that we can expect to see in the near future, including the development of alternative and sustainable asset classes; dependence on technology and digital innovation; commitment to customer-centricity; and drive for collaboration across regions.
“With these, capital market players can rest assured that exchanges will continue to execute on their mandate to deliver a platform to raise and access capital even during a crisis.
“Certainly, we are living in unprecedented times, but from what we have heard here today, I believe that we can all leave with the confidence that there is a lot to look forward to in this ‘new normal’,” he said.