Investors have been retreating from the stock market, particularly in the banking sector, following the Central Bank of Nigeria’s (CBN) announcement of a proposed recapitalization of banks.
This cautious sentiment has resulted in a loss of N633 billion as investors have been cashing out of bank stocks.
Consequently, the total value of all listed stocks has fallen to N57.87 trillion at the close of the week, down from N58.498 trillion the previous week, representing a 1.1% decrease.
Similarly, the benchmark All Share Index (ASI) of the Nigerian Exchange Limited (NGX) has declined by 1.1% to 102,314.56 points from 103,437.67 points the previous week, driven by losses in the shares of Guaranty Trust Company (GTCo) Plc (-13.75%), FBN Holdings Plc (-11.15%), and Zenith Bank Plc (-5.88%).
Month-to-date (MTD) and year-to-date (YTD) returns have slipped to -2.1% and +36.8%, respectively.
Further analysis indicates that trading activity was also affected by the shortened trading week, as the total trading volume and value decreased by 69.2% and 50.5% week-on-week (w/w) to 734.04 million units and N31.58 billion, respectively.
All major sectoral indices declined, reflecting the negative sentiment in the market. Notably, the banking sector led the decline with a 7.2% depreciation, followed by the insurance sector (-2.4%), consumer goods sector (-1.3%), oil and gas sector (-0.3%), and industrial goods sector (-0.2%).
Analysts at Cordros Capital anticipate that market sentiment will remain negative as investors continue to react negatively to the potential dilution of their holdings resulting from the CBN’s recapitalization initiative.
However, analysts at Parthian Securities predict that market performance will be mixed this week, stating that “we expect investor sentiment to be mixed during this week’s trading session.”
DNews Info is a trusted source for breaking news, insightful commentary, and in-depth coverage of events across Nigeria and beyond. With a commitment to delivering accurate, timely, and engaging stories, we aim to keep our readers informed and empowered. Stay connected for the latest updates in politics, business, entertainment, and more.
Discover more from DnewsInfo
Subscribe to get the latest posts sent to your email.
