Investors net worth drop by 116bn in August

Investors net worth dropped by N116 billion in the month of August occasioned by profit taking in spite of impressive half year results, our correspondent reports.

A monthly data obtained by our reporter from the Nigeria Stock Exchange showed that market capitalisation during the period dipped N116 billion or 0.94 per cent to close at N12.237 trillion compared with N12.353 trillion posted in July.

Similarly, the All-Share Index which opened for the month at 35,844.00 lost 339.38 points or 0.95 per cent to close at 35,504.62 following price depreciation.

Also, the turnover of shares traded decreased by 13.63 per cent with an exchange of 7.48 billion worth N198.45 billion transacted in 97,071 deals.

It was reported that this is against the 8.66 billion shares worth N97. 08 billion traded in 89,911 deals in July.

The Financial Services sector was the toast of investors with a turnover of 5.53 billion shares valued at N61.98 billion achieved in 53,211 deals.

Access Bank was the most active in the sector having accounted for 963.22 million shares worth N9.82 billion transacted in 4,944 deals.

It was followed by Zenith Bank having accounted for 620.44 million shares valued at N14.93 billion transacted in 7,467 deals.

A further breakdown of the month’s activity chart indicated that Industrial Goods sector came second in the month’s activity chart with a turnover of 536.04 million shares worth N96.98 billion achieved in 4,555 deals.

Dangote Cement was the toast of investors in the sector, accounting for 446.05 million shares valued at N94.04 billion achieved in 1,291 deals, while Lafarge Africa traded 34.92 million shares worth N2.03 billion in 1,797 deals.

Consumer Goods followed with an exchange of 531.89 million shares valued at N33.77 million transacted in 20,869 deals.

Dangote Flour was the toast of investors in the sector, accounting for 141.51 million shares worth N893.64 million in 3,861 deals and Dangote Sugar recorded a turnover of 100.96 million shares valued at N1.36 billion in 3,173 deals.

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, said the stock market ended August on a negative note with a fall in the All Share Index and the market capitalisation.

Uwaleke said that the market was largely bullish in the first few days of August chiefly in reaction to favourable corporate earnings announcements but turned bearish as profit taking took centre stage during the last few days ahead of the Muslim Sallah celebrations.

“The performance of the market in September is also likely to be mixed but driven more by profit taking as was the situation towards the end of August since most quoted companies’ financial results have been released,’’ Uwaleke said.

He said that the market sentiments in September would be influenced by the crude oil price in the international market and the liquidity situation in the Foreign Exchange market and the implementation of the 2017 budget.

Uwaleke added that unfavourable recent rating by Fitch of B+ with a negative outlook could dampen foreign investors’ sentiment.

He said the National Bureau of Statistics GDP growth figure for the second quarter of 2017 expected to be released this month and the outcome of the Central Bank of Nigeria Monetary Policy Committee meeting scheduled late in September would also determine market trends.

According to him, just like in August, the market direction will be determined by the performance of high-cap stocks such as Dangote Cement.

Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd, attributed the performance to profit taking embarked by investors during the period.

Omordion said that investors should position in stages in valued stocks with high upside potential, noting that most stocks on exchange were still undervalued.

He said that the market took back all the gains recorded during the review period.