The bears maintained their strong grip on the stock market as trading resumed for the week monday, causing the Nigerian Stock Exchange (NSE) All-Share Index to fall by 0.83 per cent to close at 25,587.09. Similarly, market capitalisation shed N69.6 billion to close lower at N8.8 trillion. The negative performance yesterday has worsened the year-to-date decline to 4.7 per cent.
The market has been bearish as investors’ sentiments remained dampened by poor corporate earnings by companies. Market analysts at Cordros Capital Limited said they expect positive corporate performance to change the negative trend going forward.
At the close of trading only eight stocks appreciated while 25 shed value. In all, the weakness on the day was predominantly driven by PZ Cussons (-4.95 per cent), United Bank for Africa (-4.00 per cent), Transcorp (-2.63 per cent), Total (-2.24 per cent), Access Bank (-2.2 per cent), Dangote Cement (-1.7 per cent), Zenith Bank (-1.4 per cent), Oando (-1.0 per cent), Guinness (-0.4 per cent), and Forte Oil (-0.4 per cent).
However, UACN Property Development Company (UPDC) Plc led the price losers’ chart, depreciating by 9.2 per cent to close at N2.25 per share. At the current price, some market operators said the bid by the company to raise additional funds through a rights issue is under threat. According to them, the price is below the N3.00 issue price proposed by the company. UPDC has applied to raise N5billion through a right issue of 1.719 billion ordinary share of 50 kobo each at N3.00 per share.
The Chairman of UPDC, Mr. Larry Ettah had said the capital injection was needed to deleverage the company and boost its operations.
“Our strategy for 2016 and beyond includes deleveraging the business through equity capital injection by way of rights issue, sell down of surplus stake in the REIT and disposal of low-performing assets, as well as leveraging on partnerships and alliances that are in sync with the company’s long term goals,” he had said.
However, market operators said the continued decline in the price of UPDC may affect the amount to raise from the right issue.
Meanwhile, United Capital Plc led the price gainers with 4.7 per cent to close at N3.72, trailed by Livestock Feeds Plc with 4.0 per cent, while AIICO Insurance Plc added 1.7 per cent.