Election fears: NSE turnover nosedives in January

The volume of shares traded on the Nigerian Stock Exchange (NSE) in January dropped by 42.38 per cent due to uncertainties surrounding the forthcoming general elections, said analysts.

 Specifically, 6.24 billion shares worth N59. 28 billion were exchanged in 80,888 deals by investors in January. The turnover and volume during the period dropped by 42.38 per cent and 16.16 per cent, respectively when compared with figures achieved in December 2018. The market posted a turnover of 10.83 billion shares worth N 70. 71 billion traded in 59,132 deals for the month of December 2018.

Data obtained by NAN from the exchange indicated that the financial services sector remained the most active in volume terms, accounting for 3.43 billion shares valued at N22.62 billion in 28,671 deals. Diamond Bank emerged the most sought equity during the period in volume terms, with an exchange of 1.31 billion shares worth N2.72 billion in 3,918 deals. GT Bank came second with 469.59 million shares worth N15.24 billion in 5,775 deals, while conglomerates trailed with a turnover of 6.63 billion shares valued at N16.54 billion exchanged in 10, 541 deals.

 Transcorp listed under the conglomerates came third with a total of 288.76 million shares worth N334.33 million transacted in 2,476 deals, while UACN traded 21.09 million shares valued at N184.93 million achieved in 934 deals. It was followed by Nigerian Breweries which accounted for 40.84 million shares worth N3.07 billion traded in 1,814 deals, while Honeywell sold 27.98 million shares valued at N33. 80 million in 723 deals.

Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., attributed the drop in the activities of the stock market during the review period to cautious trading ahead of this month’s election. Omordion said investors had developed a ‘wait and see attitude’ to ascertain the outcome of the election.

He, however, attributed dominance of Diamond Bank in the month’s activity chart to its proposed merger with Access Bank, saying the proposed merger boosted the demand for the bank’s shares. According to him, the proposed merger entails that Access Bank acquires the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

 “Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising N1 per share in cash,” Omordion said. He said the scheme of the merger released by the management showed that the transaction would include the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

 An analysis of the price movement table during the period indicated that Royal Exchange Assurance emerged the best performing stock in percentage terms, growing by 31.82 per cent to close at 29k per share. Julius Berger came second with 29.55 per cent, while Sterling Bank followed with a growth of 25.79 per cent.

 Other top gainers’ are Cement Company of Northern Nigeria, Union Diagnostic, Redstar Express, ABC Transport and Caverton, among others. Conversely, Mcnichols emerged the worst performing stock in percentage terms with a loss of 29.79 per cent to close at 33k per share. Other top losers in percentage terms are Flourmills, GSK, Berger Paint, Consolidated Hallmark Insurance, Newest ASL, Etranzact and Seplat, among others.

Omordion said that the month’s biggest gainers were penny stocks and medium capitalised stocks, which were grossly impacted by low price attraction and sentiments. He said low and medium capitalised stocks topped the decliners table due to profit taking and sell pressure triggered by unimpressive third quarter results and political tension in the country. (NAN)