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Economy In A Shambles As Market Capitalisation Drops By N85b In Six Hours

The Stock Market gained about 5% percent when Muhammadu Buhari was elected as the President of Nigeria in 2015, few more down the line, it began to experience distress as stockbrokers to lose confidence in the economy due to government policies.

A year later, precisely in 2016, the country slipped into recession, second time in almost four decades, the first being the time Buhari took over power in 1984 as a military head of state.

After he was declared as the Nigeria democratically elected president for second term, the market capitalisation of listed equities shed N85 billion in six hours of trading to what traders attributed to profit taking as a result of the presidential election.

Specifically, at the close of transactions yesterday, the market capitalization of listed equities which opened at N12, 194 billion, shed 0.7 per cent or N85 billion to close at N12,109 billion.Also, the All-Share Index (ASI) which measures the performance of quoted companies shed 226.30 points or 0.69 per cent to close at 32,473.82 from 32,700.12 at which it opened for transactions on Monday.

Reacting to the development, the Managing Director of Highcap Securities Limited, David Adonri, in a telephone interview with The Guardian linked the market downturn to sell off by domestic and foreign portfolio investors.“The market is not happy, the situation is getting clearer that the ruling party may win the election according to figures INEC is churning out. It is completely contrary to expectations of the market.

“There is already a slowdown in the market because volume is increasing while value is not increasing commensurably with value, instead, it is decreasing. When volume is increasing and value decreasing, it means that the supply is overwhelming demand and the next thing is that the market starts slowing down.

“The situation may extend to the end of this week, and when the result is fully out, the whole market will definitely react. Are we going to go through the same suffering in the next four years? God will save us, ” he said.

According to a News Agency of Nigeria (NAN) report, Nestle led the loser’s chart, shedding N70.00 to close at N1,510 per share while Union Bank of Nigeria followed with a loss of 60 kobo to close at N6.65 per share. FBN Holdings was down by 30 kobo to close at N8.00 per share.

On the other hand, Guinness emerged the day’s highest price gainer with N2.05 kobo to close at N67.15 per share. Dangote Flour followed with a gain of N1.00 to close at N12.05 per share while Oando added 65 kobo to close at N7.25 per share.Further breakdown of yesterday’s trading showed that the volume of shares traded rose by 46.57 per cent with an exchange of 322.18 million shares worth N2.43 billion in 4,066 deals.

This amount of shares traded was against a total of 219.81 million units valued at N5.55 billion transacted in 2,999 deals on Monday.On the activity chart, Sunu Assurance recorded the highest volume, exchanging 50.81 million shares worth N10.16 million.Access Bank traded 32.30 million units valued at N203.09 million. Diamond Bank sold 28.60 million shares worth N70.10 million. The Guaranty Trust Bank accounted for 17.77 million units worth N677.66 million as the United Bank for Africa exchanged 19.02 million shares valued at N153.66 million.

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