Investors lose N663bn in biggest weekly fall in 8yrs –

N5trn inflow from fixed income to boost equities rally



Stock MarketBy Nkiruka Nnorom 

The  stock market last week suffered its biggest weekly fall in eight years with investors losing N663 billion. 

However, investment analysts  opined that the performance of the market this week will be influenced by the opposing forces of uptick in yields in the fixed income market and 2020 corporate earnings releases by quoted companies.

The market had succumbed to rise in yields in the fixed income space for the second consecutive week last week as investors became increasingly worried over the latest development in the fixed income market.

Average stop rate in the last NTB auction rose by 105 basis points (bps) to 2.33 percent from 1.28 percent at the previous auction.

This may have triggered the fresh bear run in the s tock market which resulted in investors losing N663 billion, while the benchmark All Share Index (ASI)  nosedived by 3.04 percent.

Specifically, the equities market capitalisation depreciated to N21.156 trillion from N21.819 trillion, representing 3.04 percent decline.

In the same vein, the index declined by 3.04 percent to 40,439.85 points from 41,709.09 points,  the biggest weekly fall in eight years. 

Breakdown of the week’s trading showed that  sell offs in bellwether stocks: Guaranty Trust Bank (-15.7%), BUA Cement (-7.2%), Dangote Cement (-4.4%) and Zenith Bank Plc (-3.9%) drove the weekly loss. 

       

The performance across sectors was broadly negative as all sectors closed in the red. The banking (-8.8%) sector led the losers chart followed by insurance (-6.5%), industrial goods (-5.7%), oil and gas (-1.0%) and consumer goods sector  (-0.9%).

In their comments, analysts at Cordros Capital, said: “With the latest outcome of the NTB auction pointing towards yield elevation in the near term, we expect investors to trade cautiously while taking positions in stocks with attractive dividend yields. 

“As a result, we expect the local bourse to exhibit a zig-zag pattern in the near term as the opposing forces of uptick in yields and full year 2020 corporate earnings releases dictate market performance. 

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

 

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