Sell- off in 22 stocks drag NGX indices by N197b as global market plunges
… Analysts predict gloomy outlook as Russia, Ukraine crisis persist
AS U. S stocks tumbled, following investors’ apprehension that a more aggressive approach to curb inflation would plunge the economy into a recession, the nation’s equities market also closed on a downturn yesterday as selloff in 22 stocks dragged the Nigerian Exchange Limited ( NGX) market capitalisation by N197 billion.
The All Share Index ( ASI) decreased by 364.31 absolute points, representing a dip of 0.694 per cent to close at 52,411.09 points. Similarly, the market capitalisation lost N197 billion to close at N28.255 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Airtel Africa, BUA Foods, Conoil, Nigerian Exchange Group ( Ngxgroup) and Eterna.
Reacting to the development, analysts at GTI Securities Limited said, “The Nigerian equities market closed bearish, as the Federal reserves raised its benchmark interest rates by 0.75 per cent, its most ag gressive hike since 1994. We expect cautious trading and profit taking to continue tomorrow in the domestic market.”
Vice President of Highcap Securities, David Adonri said
the rising insecurity in the country and other macroeconomic challenges, coupled with uncertainty in the global economy are fueling the decline in the equities market.
“The decline in the equities market is due to several factors which include domestic and US interest rate hike, low volume of crude oil sales due to theft, rising domestic inflation rate, rising insecurity, primary bond issuance by FGN and possibly massive sale of stocks by politicians to finance primar y elections”, he said.
However, he argued that the downturn is more from domestic issues, noting that
only impressive Q2 results can trigger another rally in the market and change the situation.
Market breadth closed negative, with 22 losers versus 12 gainers. Linkage Assurance recorded the highest price gain of 9.80 per cent, to close at 56 kobo, per share. Courteville Business Solutions followed with a gain of eight per cent to close at 54 kobo , while Japaul Gold & V entures appreciated by 6.90 per cent to close at 31 kobo.
Chams Plc went up by 4.17 per cent to close at 25 kobo , while UACN Property Development Company ( UPDC) appreciated by 4.08 per cent to close at
N1.02 kobo.