Key highlights
- Airtel Africa Plc investors lost about N556 billion (or 10%) in market capitalization at the end of Wednesday’s trading session on the Nigerian Exchange Group Plc (NGX) due to sell pressure and low investor sentiment.
- The NGX benchmark index closed at 53,018.97 points, the lowest point since January 30, 2022, for the fourth consecutive trading session, putting it on track for another week of loss.
- The decline was caused by selloffs in index heavyweights, particularly Airtel Africa Plc, which lost 10% of its opening share price due to panic sales by foreign investors who are jittery about the outcome of the 2023 general elections being contested in court.
Investors of Airtel Africa Plc, one of the major telecommunications companies quoted on the Nigerian Exchange Group Plc (NGX), recorded a loss of about N556 billion at the end of Wednesday’s trading session as the domestic bourse remained under sell pressure.
The market extended its losing streak for the fourth consecutive session as the benchmark Index closed the trading day at 53,018.97 points.
More on the loss
Checks by Nairametrics showed that the telecom stock dropped by a maximum of 10% to close at N1,331.10 per share from N1,479.00 which was the opening figure recorded the previous day’s trading.
Further checks revealed that Airtel Africa closed the trading at N5.002 trillion in market capitalisation on the Nigerian Exchange (NGX) as against N5.558 trillion when the day’s trading activities began, hence has earned a loss of N556 billion or 10%.
Low investor sentiment
The decline in share prices can be attributed to investors’ low sentiment informed by the outcome of the 2023 general elections which is being contested in the court law.
The Managing Director of Crane Securities Limited, Mr Mike Eze, told Nairametrics said that the election which was seen by many people as falling below expectations is also affecting the prices of stocks as investors; mostly the foreign ones are shying away from the Nigerian stocks. Eze noted further that panic sales on the part of foreign investors are also being witnessed due to election jittery.
What you should know
Trading activities on the floor of the Nigerian Exchange Limited closed the day’s trading on a negative trajectory as the benchmark Index closed dropped by 1.88% to close at 53,018.97 points, the lowest point since 30 January.
The decline according to analysts puts the index on track for another week of loss. On market activities, the weak performance was driven by selloffs in index heavyweights, telecom heavyweight, Airtel Africa Plc with a loss of -10.00% to offset gains in Zenith Bank Plc which recorded a gain of +1.39%, GTCO Plc with +0.41% and Lafarge Africa that grew by +0.78%.
Consequently, the year-to-date (YTD) return fell to 3.45%, while the market capitalization lost N553.71 billion to close at N28.88 trillion.
Further analysis of the day’s market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 12.78%.
A total of 197.33 million shares valued at N2.67 billion were exchanged in 3,506 deals. UBA with a gain of +0.00% led the volume chart with 64.20 million units traded, while Airtel Africa with -a 10.00% loss led the value chart in deals worth N536.80 million.
