Business
THE Managing Director of Globalview Capital Ltd., Mr Aruna Kebira, has attributed the N3.64 trillion loss recorded in the Nigerian equities market on Wednesday to a lack of market-moving catalysts and investors’ growing preference for liquidity.
Kebira told the News Agency of Nigeria (NAN) on Wednesday in Lagos that the market was currently experiencing a lull as investors awaited the release of second-quarter corporate earnings expected from July.
“The market has nothing significant to feed on at the moment. There are no major corporate results or news to drive investor sentiment.
“The next major stimulus investors are looking forward to is the second-quarter earnings season, which is still about a month away,” he said.
The stock market closed bearish on Wednesday, with investors losing N3.638 trillion as profit-taking in major stocks reversed gains recorded during the previous two trading sessions.
Market capitalisation declined by 2.35 per cent to N150.846 trillion from N154.484 trillion recorded on Tuesday.
Similarly, the All-Share Index dropped by 5,668.65 points, or 2.35 per cent, to close at 235,074.54, compared with 240,743.19 in the previous session.
Kebira said the Federal Government’s continued borrowing activities had made money market instruments more attractive, prompting some investors to shift funds from equities to fixed-income assets.
He added that some investors were also maintaining liquidity ahead of the anticipated public offering by Dangote Refinery.
According to him, recent adjustments to the Nigerian Exchange’s market microstructure, particularly changes in trading units, may also have influenced market dynamics.
Kebira, however, expressed optimism that the market would regain momentum once second-quarter earnings begin to emerge.
“As management accounts are updated and early earnings reports start coming in from July, the market will begin to respond to the performance of listed companies.
“If the majority of firms report strong growth in turnover and profitability, investors will react positively and the market is likely to rebound,” he said.
Market breadth closed negative, with 38 losers against 17 gainers.
Dangote Cement, Geregu Power and BUA Cement led the losers’ chart, shedding 10 per cent each to close at N963, N917.40 and N340.20 per share, respectively.
On the gainers’ chart, Skyway Aviation Handling Company rose by 9.92 per cent to close at N171.20 per share, while International Energy Insurance gained 9.66 per cent to close at N6.70 per share.
Trading activity also weakened, with total volume declining by 13.60 per cent to 488.08 million shares valued at N20.93 billion in 46,239 deals.
FirstHoldCo emerged as the most traded stock by volume with 57.39 million shares, while Geregu led by value with transactions worth N3.67 billion. (NAN)
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Tags: liquidity Market decline