Shares in BUA Cement Plc on the Nigerian Stock Exchange lost a total of N162.5 billion this week, as the shares of Nigeria’s second-largest cement manufacturer declined by N4.8 per share.
The N4.8 decline in BUA Cement’s share price led to the N162.55 billion loss in the market capitalization of the cement tiger.
This move can be linked to the sustained sell down in the market, as local investors cycle-out funds from the market in search of impressive yields in the fixed securities space.
This sentiment, however, has been heightened by the FG bond issuance programme, with the auction of the N150 billion bond this month reigniting concerns about stock valuations.
Data tracked this week up till the close of trade Friday revealed that the shares of BUA Cement declined by 6.42% or N4.8 to close lower at N69.95 per share.
This bearish move in the share price of BUACEMENT saw the market capitalization of the fourth most capitalized company on NSE decline from N2.531 trillion to N2.389 trillion.
What you should know
- The stock market was down for the 7th straight week, with the All-Share Index and Market Capitalization posting a loss of 0.69% to close the week at 38,382.39 points and N20.082 trillion respectively.
- The resultant effect of this is a loss of N139 billion in market capitalization, at the end of the week.
- The Industrial index to which BUA Cement belongs, dipped by 2.62% week to date, as of 19th March 2021, compared to the Nigerian Stock Exchange All Share Index -0.69%.
- The Industrial index is down by 8.73% YTD, while the All-share index is down 4.69% YTD.
SEC ban on foreign stocks denies Nigerian investors of generational wealth
Amid the booming interest in America, the SEC has reminded participants and investors that only authorized securities can be sold to the Nigerian public.
As Americans turn their attention to stock and cryptocurrency markets, trading platforms Robinhood and Coinbase took the top two slots in Apple’s App Store last week.
According to Sensor Tower, Robinhood took the top spot on Friday, followed by crypto trading platform, Coinbase. TikTok came in third place. The surge in popularity coincides with Coinbase’s Nasdaq debut on Wednesday when bitcoin surpassed $64,000 for the first time.
The rise in popularity reflects an increase in retail trading during the pandemic, as well as a “meme stock” community centred on companies like GameStop. After a group of traders on Reddit deployed a short squeeze in January, the video game store became a household name.
This isn’t the first time Robinhood has topped the charts. The brokerage firm was the most successful app in the Apple and Google app stores in January, at the height of the GameStop controversy. Another trading app, Webull, came in second. The top ten also included Coinbase, Square’s Cash App, and Fidelity. During the height of the GameStop frenzy, Robinhood, which shut down the buy-side of those stocks, received backlash on social media, and its CEO was later called to testify in front of Congress.
Amid the booming interest in America, the Securities and Exchange Commission of Nigeria (SEC Nigeria) has exercised its legal authority and reminded participants and investors that only authorized securities can be sold to the Nigerian public. To put it another way, international stocks such as Tesla Inc., Apple, Amazon, Google, GameStop and others that are not currently listed in Nigerian jurisdiction should not be sold to Nigerian residents or businesses.
As a result of the new SEC directive, young Nigerians who have been using the new invest tech service providers to help diversify their portfolios face new challenges especially with the CBN ban on crypto transactions.
This creates a sizable problem particularly for traders that would at least want to earn above the 18% inflation rate.
What this means:
- Retail investors are paying more attention to financial applications as they have witnessed massive gain in assets like crypto and meme stock.
- Nigerians may find it difficult to benefit from international retail platforms with the SEC announcement.
- SEC regulation may hamper the fundamental ideology for globalization especially from a finance perspective.
Bloody Sunday: Over 1 million investors liquidated, altcoins crash by 20%
For the day, about 1,018,638 investors had their account worth about $10 billion liquidated.
A significant number of investors in the crypto market have had their accounts liquidated amid the sudden drop seen in a number of altcoin assets.
For the day, about 1,018,638 investors had their account worth about $10 billion liquidated. The largest single liquidation order happened on Binance-BTC valued at $68.73 million.
The flagship altcoin is under high selling pressure with Ethereum trading at $1,952 at the time of writing this report, down 21.46% for the day. It is the biggest daily drop since March 12, 2020.
Such a fall pushed Ethereum’s market value to $247.15 billion, or 12.16% of the total cryptocurrency market value. At its highest, Ethereum’s market value was close to $300 billion.
On the altcoins side, the sudden crash at the time of writing this report could not be fully assessed, but market sentiments point to rumours that the U.S. Treasury is planning to charge several financial institutions for money laundering using crypto.
Top cryptos such as XRP lost as much as 21.17%, Polkadot and Litecoin were down by 20%, bitcoin cash down 20% for the day, while dogecoin has lost about 15% in value.
Many weeks ago, leading United Kingdom financial regulator, the Financial Conduct Authority, issued a piece of stern advice on crypto investments. The statement highlighted the risks associated with investing in Bitcoin and other crypto assets and warned the public that there were high chances that all their funds could be lost.
“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.
“Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,” said the FCA.
That said, a significant number of crypto investors appear to be shrugging off the huge fall as another typical bump on the crypto path, and one which, no doubt, will likely see crypto trading volume return as crypto investors look to buy what many are viewing as a bargain, to buy into what is still very much a bullish run.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- PZ Cussons Nigeria Plc appoints Ifueko Okauru as Independent Non-Executive Director.
- Chams Plc announces the appointment of Patricia Duru as new CFO
- NPF Microfinance Bank reports a profit after tax of N614.42 million in FY 2020.
- UACN Property Development Company Plc appoints Ojo Odunayo as new CEO.
- Unilever Nigeria Plc reports a loss of N492 million in Q1 2021.