Trading on the Nigerian Exchange Ltd. (NGX) ended negatively on Thursday, with market capitalisation falling by N3.281 trilion, halting two sessions of gains.
This was driven by profit-taking in some blue-chip stocks like: Dangote Cement, Presco, WAPIC, Austinlaz and Lasaco Assurance as well as 31 other declining stocks.
The NGX market capitalisation dropped by N3.281 trillion, or 1.98 per cent, closing at N162.134 trillion, down from Wednesday’s N165.415 trillion.
Similarly, the All-Share Index declined by 1.98 per cent, shedding 5,052.22 points to settle at 249,710.59 from the previous day’s N254,762.81.
As a result, the market’s Year-to-Date (YTD) return dropped to 60.47 per cent while the market breadth also closed negative, recording 36 losers compared to 20 gainers by the end of trading.
Leading the losers’ chart, Presco and Dangote Cement declined by 10 per cent each, closing at N1,656.80 and N1,341 per share respectively.
While WAPIC dropped by 9.91 per cent, finishing at N2, Austinlaz and Lasaco Assurance fell by 8.57 per cent each, ending the session at N2.24 and N1.60 per share respectively.
On the gainers’ chart, Computer Warehouse led by 9.94 per cent, settling at N17.15, Abbey Mortgage Bank trailed by 9.84 per cent, closing at N6.70 while Honeywell Flour increased by 9.82 per cent, finishing at N26.85 per share.
Also, Etranzact advanced by 9.71 per cent, settling at N18.65 and Caverton Offshore Support Group grew by 8.96 per cent, closing at N3.65 per share.
An analysis of the market activity revealed overall improvements across the market deals, value and volume as 856.28 million shares worth N74.09 billion was traded in 33,540 transactions.
This is in contrast with 552.31 million shares valued at N37.46 billion that was exchanged across 33,047 deals.
First Holdco led trading activities with 478.42 million shares valued at N44.94 billion, accounting for 55.87 per cent of the total volume and 60.66 per cent of the day’s value.
Meanwhile, Mr Tajudeen Olayinka, Chief Executive Officer, Wyoming Capital and Partners, attributed the decline to liquidity constraints arising from funds committed to the Dangote Petroleum Refinery IPO.
Olayinka said the market’s liquidity challenge had persisted for some time, as he explained that the impact of the IPO was still being felt in spite of the conclusion of the offer.
He said the situation was not unusual, adding that the market had experienced similar liquidity constraints while the Dangote Petroleum Refinery IPO was ongoing.
According to him, the absorption of funds by the IPO has reduced liquidity available for other equities, making it difficult to sustain meaningful price appreciation.
“The equity market is not ready to recover so quickly. That is what is important.
“Until new money comes into the market, it will be difficult to see anything meaningful in terms of price appreciation,” he said.
Olayinka emphasised that fresh capital inflows would be necessary to improve market liquidity and support positive price movements. (NAN)
