Market Sheds N35bn on Profit Taking as Trading Resumes

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Trading at the Nigerian stock market began the week on negative note as some investors locked in profit while others await the outcome of the Central Bank of Nigeria(CBN)’s Monetary Policy Committee (MPC).

The market has recorded significant gains in the past weeks. However, profit taking by some investors led to a decline of 0.4 per cent in the Nigerian Stock Exchange (NSE) All-Share Index to close at 27,015.97. Similarly, market capitalisation shed N34.7 billion to close at N9.3 trillion.

The volume and value of trading was also lower. Investors traded 316.5 million shares worth N1.9 billion, showing a decline of 43.4 per cent and 46.8 per cent in volume and value respectively company Friday’s performance.
Market analysts linked the low volume of trade to decision of some investors to wait for the outcome of the MPC meeting, which began yesterday and will end today.

Analysts at FBN Capital said the monetary policy decisions to be taken by the MPC had been made more complicated by the public release of the national accounts for first quarter (Q1) 2016 on Friday.
According to the analysts, they had penciled in a 150bps increase in the policy rate to 14.50 per cent by the committee to combat rising inflation and the related expectations.

“Then we learnt that Gross Domestic Product (GDP) had contracted by -0.4 per cent in the first quarter (Q1) and, more importantly in this context, the non-oil economy by -0.2 per cent. The committee therefore, has to contend with a shrinking economy that is likely to contract further in the current quarter and rapidly rising inflation, as well as exchange-rate policy,” they said.

Twenty-eight stocks depreciated, compared with 14 stocks that appreciated. The major losers that dragged the market included Zenith Bank Plc, Access Bank Plc and Nigerian Breweries Plc, which fell by 4.9 per cent, 4.7 per cent and 0.6 per cent in that order. But the loser’s table was led by PZ Cussons Plc and Union Dicon Salt Plc with 4.9 per cent apiece.

On the other hand, Stanbic IBTC Bank Plc led the price gainers with 10.2 per cent, followed by DN Meyer Plc with 8.2 per cent, just as Fidson Healthcare Plc appreciated by 5.0 per cent.