Stock Investors Record Steady Loss In Three Months, As The Market Depreciates By N2.57tn In October

Market investors on the floor of the Nigerian Stock Exchange (NSE) Ltd have continued to record steady losses in the last three months, as the market again depreciated by N2.57 trillion in October.

Naija News reports that the depreciation of the market last month follows a similar downturn in both September and August, as N430 billion and N283 billion losses were recorded respectively.

Stock investments have however lost N3.28 trillion between August 1 and October 31, 2022, due to the three-month consecutive depreciation of the market.

It was reported that trading activities, began with a market capitalization of N27.163 trillion in August, only to close at N23.88 trillion as of October 31, 2022, which means the market shed a total of N3.28 trillion in the last three months under review.

A further breakdown shows that the stock market depreciated in October by N2.57 trillion because of investors’ aggressive profit-taking in Airtel Africa and Dangote Cement Plc, which had impacted the overall market capitalization in September.

Findings also revealed that Airtel Africa’s stock price in the three months under review has depreciated by N630.40 or 33.08% to ₦1,275.00 per share, from ₦1,905.40 per share in August, while Dangote Cement’s stock price also dropped to N220.50 per share in October, representing a decline of 16.8% or N44.5 from N265 per share in August.

Consequently, the NSE All Share Index, which tracks the general market movement of all listed stocks, shed 12.24 per cent to close on October 31, 2022, at 49,024.16 basis points from 49, 950.32 basis points on August 1, 2022.

Naija News understands that in his reaction to the continuous fall in the stock market, President of PEARL Awards, Tayo Orekoyaa, who is a market analyst told Punch that the capital market would not operate in isolation.

Orekoya said the major factor contributing to the recent depreciation was the incessant increase in the benchmark interest rates.

He explained that “One major factor that has contributed to losses is the increase in the Monetary Policy Rate. The rates by the central bank were increased in May. It was 13% by July 2014. By September, talked about 15.5%.

“Naturally, you will see that investors would want to withdraw from equities markets to fixed income-yielding investments because there is a moderate risk on the fixed income investments. Of course, as much as the MPR keeps going up, then you would expect that investors will move and that accounts for the loss in the equities market, in favour of the fixed-income market,” the analyst noted.