Nestle Nigeria Plc, one of the major fast consumer moving goods companies quoted on the Nigerian Exchange Group Plc (NGX), recorded a loss of about N199.036 billion at the end of last week to top the losers’ chart of the following sustained sell pressure witnessed on the stock.
Checks by Nairametrics showed that the consumer goods stock dropped by 20.67% to N963.90 per share at the end of the week from N1, 215.00 with which it opened the trading week on Monday 21st November.
Further analysis showed that Nestle closed the trading week with N764.0414 billion in market capitalisation, as against N963.077 billion at the beginning of the trading week.
Negative sentiment: The decline in Nestle’s share price was due to investors’ negative sentiment which triggered sell-offs, plunging the stock’s value down. This comes amid a build-up to the 2023 general election and a recent interest rate hike by the Central Bank of Nigeria.
Market operators earlier told Nairametrics that the decision of the CBN to increase the interest rate by 16.5% could hurt the equities market by prompting investors to navigate towards fixed-income space.
Pre-election concerns: Analysts at CardinalStone Partners Limited noted that the build-up to the 2023 election will keep foreign investors at bay and throw up more financial account-related concerns.
The analysts, while commenting on the state of the nation in their 2022 mid-year outlook themed: ‘Same Challenges, New Shocks’ argued that pre-election year concerns and fears of negative pass-through to inflation will likely limit the magnitude of currency adjustment made at the official market in the current year.
According to them, akin to the trend witnessed in emerging and frontier markets, Nigeria was also mostly unappealing to foreign capital providers in H1’22.
They attributed the sentiment to geopolitical uncertainties and hawkish rendition from global central banks.
In addition to these global factors, they pointed out that the lack of market-reflective FX rates, illiquidity and a backlog of uncleared foreign exchange demand dampened investors’ sentiments.
In case you missed it: Despite Nestle’s loss, the NGX All-Share Index and Market Capitalization appreciated by 6.88% to close the week at 47,554.34 and N25.902 trillion respectively.
Similarly, all other indices finished higher except for NGX Oil & Gas and NGX Sovereign Bond, which depreciated by 1.29% and 0.32% respectively, while the NGX ASeM and NGX Growth indices closed flat.
A total turnover of 711.618 million shares worth N15.338 billion in 16,662 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 694.376 million shares valued at N8.667 billion that exchanged hands last week in 15,418 deals.
The Financial Services Industry (measured by volume) led the activity chart with 461.230 million shares valued at N3.697 billion traded in 7,653 deals, thus contributing 64.81% and 24.10% to the total equity turnover volume and value, respectively.
The Conglomerates Industry followed with 99.881 million shares worth N139.213 million in 582 deals. The third place was the ICT Industry, with a turnover of 37.953 million shares worth N7.577 billion in 1,050 deals.
Trading in the top three equities are Transnational Corporation Plc, AIICO Insurance Plc, and Zenith Bank Plc (measured by volume) accounted for 194.600 million shares worth N1.191 billion in 1,974 deals, contributing 27.35% and 7.76% to the total equity turnover volume and value respectively.