Capital Market Report : 2019 elections shape market indices

Chinwendu Obienyi

Political concerns ahead of the 2019 elections have continued to dampen proceedings on the Nigerian Stock Exchange (NSE) as the All-Share Index (ASI) closed the third trading week of November on a negative note.

The ASI which opened the week at 32,058.28 points, shed 0.96 per cent or 379.58 basis points to close the week at 31,678.70 points while market capitalization closed Friday 23,2018 at N11.565 trillion from N11.704 trillion recorded previously, thus representing a N139 billion loss.

This is in comparison with the 0.4 per cent week-on-week recorded in the previous weekly session while year-to-date loss printed at -16.2per cent.Consequently, the Month-to-Date and Year-to-Date losses moderated slightly to 1.48 and 16.37 per cent respectively.

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Similarly, moderate gains by the components of the banking and the insurance sector mitigated the loss from the Consumer Goods and Oil and Gas sector while Industrial goods remained unchanged.Market breadth was negative as 14 equities depreciated in value while 13 others appreciated in value.

Ikeja Hotel topped the losers’ chart with 9.73 per cent to close at N1.67 per share. Union diagnostics was next with 7.41 per cent to close at 0.25 kobo, WAPCO declined by 6.67 per cent to close at N14, Flourmill fell by 3.18 per cent to close at N19.80 while Dangote cement decreased by 2.50 per cent to close at N195.On the positive side, Honeywell topped the gainers’ chart with 9.90per cent to close at N1.11, PZ followed with a gain of 9.79 per cent to close at N10.65, CAP trailed with 9.77 per cent to close at N29.20,Prestige increased by 9.72 per cent to close at 0.79 kobo while Diamond Bank rose by 7.95 per cent to close at 0.95 kobo per share.

On the activity chart, Diamond Bank was the most active stock, selling 113.30 million shares worth N102.01 million. Nigerian Breweries traded 15.29 million shares worth N1.28 billion while Zenith Bank sold 13.80 million shares valued at N331.33 million.

At the close of trading on Friday, the total volume of stocks traded stood at 223.84 million units while the total value of trade stood at N2.62 billion, executed in 2,819 deals.Analysts have linked the lull situation in the market to the pull back from foreign investors due to brewing political concerns.

They further added that domestic investors have adopted a cautious approach to the equities market in the face of the bearish market trend.

Also, the Monetary Policy Committee (MPC) met this week, and vote dunanimously to leave the policy rate of 14 per cent and other parameters unchanged.

Only two months previously, six out of 10 members had voted for tightening, either through the policy rate or through the cash reserves requirement (CRR) ratio.According to FBN Quest Research, this was the time to tighten for the signal to offshore investors, and stay ahead of the curve in our view.

A move in January could be problematic, and we would not be surprised if the rate now remains on hold throughout 2019.Analysts at Afrinvest said: “Irrespective of the overall negative performance in the week, we noticed higher buying interest in bellwethers.

We thus expect the broad performance to remain weak as investors’ sentiment remains pressured by development in the political environment”Aspirants of the two major political parties, All Progressive Congress(APC) and Peoples Democratic Party (PDP) as of last week came up with different strategies centered around driving the economy in the right direction come 2019.

According to analysts at United Capital Plc, “we think this provides a blue-print for both parties to push their agenda before the electorate while availing investors with a template to assess the outlook for the Nigerian economy over the next four years under the APC or the PDP”.

 

The post Capital Market Report : 2019 elections shape market indices appeared first on The Sun Nigeria.

Source: news

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