Economy

Profit taking: NGX extends losing streak by N33bn

… As NGX tasks FG, private sector on capital market for infrastructure devt.***

Profit-taking activities continued on Thursday in the Nigerian equities market as investors lost N33 billion on sell-offs in 23 stocks.

The newsmen report that the market capitalisation dipped N33 billion or 0.15 per cent to close at N22.589 trillion against N22.622 trillion on Wednesday.

Also, the All-Share Index lost 63.93 points or 0.15 per cent to close at 43,285.97 from 43,349.90 posted on Wednesday.

Accordingly, the month-to-date and year-to-date gains got lower at 3.0 per cent and 7.5 per cent, respectively.

The market negative performance was driven by price depreciation in large and medium capitalised stocks which are; FBN Holdings (FBNH), Lafarge Africa, UACN, Nigerian Exchange Group (NGXGroup) and Guaranty Trust Holding Company (GTCO).

Analysts at Afrinvest Ltd said, “In the final trading session, we expect an extension of the prior day’s bearish performance in the absence of a positive driver.”

Also read: Bears resurface on NGX, indices down by 0.22%

Market breadth was negative with 23 laggards, relative to 12 gainers.

Chams Plc led the losers’ chart in percentage terms by 8.70 per cent to close at 21k per share.

Regency Alliance Insurance followed with 7.50 per cent to close at 37k, while Unity Bank declined by 7.41 per cent to close at 50k per share.

FBNH shed 6.50 per cent to close at N11.50, while Associated Bus Company dropped 6.06 per cent to close at 31k per share.

Conversely, eTranzact International and Vitafoam Nigeria led the gainers’ chart in percentage terms with 10 per cent each to close at N2.09 and N20.90 per share, respectively.

Academy Press followed with 9.09 per cent to close at 36k per share.

Jaiz Bank was up by 6.45 per cent to close at 66k, while AXA Mansard Insurance appreciated by 6.33 per cent to close at N2.35 per share.

Also, the total volume of trades declined by 20.5 per cent to 210.55 million units valued at N2.61 billion exchanged in 3,423 deals.

This was in contrast with 264.79 million shares worth N6.08 billion traded in 4,230 deals on Wednesday.

Transactions in the shares of Sterling Bank topped the activity chart with 60.19 million shares valued at N90.31 million.

eTranzact International followed with 14.08 million shares worth N29.44 million, while Transcorp sold 13.14 million shares valued at N12.70 million.

GTCO traded 10.95 million shares worth N288.45 million, while Jaiz Bank accounted for 10.43 million shares valued at N6.95 million.

In the same vein, the Nigerian Exchange Ltd. (NGX) has urged the Federal Government and the private sector to embrace the capital market for long-term funds to address the country’s infrastructure deficit.

Chief Executive Officer of NGX, Mr Temi Popoola, said this at a news conference on Thursday in Lagos in preparation for the Exchange Capital Markets Conference.

Popoola said the government and the private sector must harness the opportunities in the country’s capital market for infrastructure development and employment, instead of depending on external borrowings.

Popoola noted that the challenges facing the country in terms of infrastructure would be resolved through capital market instruments.

“Most countries have used the capital market to boost their infrastructure. The capital market is the appreciative way of resolving our infrastructural issue.

“For us at the Exchange, we want to push this narrative, let’s bring the capital market to the centre of the discussion. This is another tool we can deploy to address many of these challenges,” he said.

He said the NGX would continue to engage the Federal Government, the private sector, policymakers and other stakeholders on the inherent opportunities in Nigeria’s capital market.

Popoola said the Exchange would remain committed to investor education to boost participation in the market.

According to him, the NGX will be holding its inaugural Nigerian Capital Markets Conference on Nov. 30.

He said the conference would bring together policymakers, government, financial experts, business leaders, investors, international development partners, regulators and other stakeholders, to share insights and broaden the thinking needed for greater capital flows through innovative sources of financing.

Popoola said: “This is going to be the first of its kind in the country. The event will address what the market can do for the government, private sector and the opportunities the market offers.”

He also stressed the need for government policy to drive and revive the capital market.

“Some of the rules that govern the market today need to be reviewed,” Popoola said.

He noted that retail investors in the market at the moment stood at three to four million, which he said was still very low when considering the country’s 200 million population.

Mr Jude Chiemeka, Divisional Head, Trading Business, NGX, said asset-backed securities could be harnessed by both government and private sector to address the country’s infrastructure needs.

Chiemeka said the conference would highlight how investors, more importantly, issuers can utilise the capital market to raise funds.

He said the government could focus on the green bond, Sukuk, in addressing the infrastructural gap.

“The Eurobond the government has raised or going to do, we do have a lot of assets in the domestic economy that can actually be securitised, which government can use to finance the infrastructural needs.

“Our focus will also be around diversification of the capital market. For a long time our market had a lot of international flows and each time we have global financial crises or foreign exchange issues as we are having now, the market takes a huge hit.

“The PFAs have assets of over N30 billion and with proper development, we should be able to have, like other markets, control 70 per cent of domestic flows.

“We should be able to launch our derivatives market, and with this instrument, we can attract the millennium due to their high-risk appetite,” Chiemeka said.

He stressed that the capital market, apart from solving problems, also created opportunities that would help in employment generation.

He noted that the economy would not witness the needed growth and developement without the active involvement of the capital market.

 

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