Stock Market Down 0.44% as Rot in CBN Scares Investors

By Dipo Olowookere

The rot in the Central Bank of Nigeria (CBN) as exposed last Friday in its audited financial statements for 2022 took its toll on the Nigerian Exchange (NGX) Limited on Monday.

This was because the stock market was down by 0.44 per cent yesterday, as investors reacted to the revelations, which showed that the apex bank had depleted the nation’s foreign reserves to a level that could make it difficult to defend the Naira.

The Naira has been in free-fall since June, when it was floated to allow market forces to determine its true value against the United States Dollar. At the moment, it is moving closer to N1,000/$1 at the parallel market.

Yesterday, the equity market was under selling pressure as traders moved to quickly reduce their exposure to Naira-denominated investments, including stocks.

The banking and the energy sectors were the worst hit during the session, as they closed lower by 1.13 per cent and 0.44 per cent apiece.

However, the insurance space appreciated by 0.80 per cent, the consumer goods counter improved by 0.47 per cent, and the industrial goods sector rose by 0.01 per cent.

Unable to withstand the profit-taking, the All-Share Index (ASI) moderated by 289.00 points to 65,036.37 points from 65,325.37 points, and the market capitalisation contracted by N158 billion to N35.415 trillion from N35.573 trillion.

Business Post reports that investor sentiment was slightly weak on Monday after the bourse closed with 23 price losers and 22 price gainers, implying a negative market breadth index.

Eterna finished on top of the losers’ table after it shed 9.90 per cent to N17.75, Sunu Assurance declined by 9.57 per cent to N1.04, University Press lost 9.24 per cent to trade at N2.26, FTN Cocoa slumped by 8.44 per cent to N2.06, and Okomu Oil moderated by 5.66 per cent to N250.00.

On the flip side, Cornerstone Insurance ended on top of the gainers’ log after it chalked up 9.32 per cent to N1.29, Omatek added 8.82 per cent to its value to trade at 37 Kobo, The Initiates gained 8.51 per cent to settle at N1.02, Chams leapt by 7.37 per cent to N1.02, and RT Briscoe rose by 6.98 per cent to 46 Kobo.

A look at the activity chart revealed that 259.0 million stocks worth N4.2 billion exchanged hands in 5,899 deals on the first trading day of the week compared with the 489.7 million stocks worth N8.4 billion traded in 5,804 deals on the last trading session of last week, representing an improvement in the number of deals by 1.64 per cent, and a shortfall in the trading volume and value by 47.11 per cent, and 50.00 per cent, respectively.

Transcorp posted the highest trading volume with 41.8 million units valued at N167.9 million, Access Holdings traded 18.2 million units worth N312.7 million, GTCO exchanged 15.6 million units for N585.1 million, Sterling Holdings transacted 14.2 million units valued at N51.0 million, and UBA sold 13.0 million units for N185.4 million.