Investors of Airtel Africa Plc, one of the major telecommunications companies quoted on the Nigerian Exchange Group Plc (NGX), recorded a loss of about N826 billion at the end of Monday’s trading session as the domestic bourse came under sell pressure.
The market returned to a losing streak after recording significant gains on Friday as the benchmark index weakened by 0.89% to close at 98,703.68 points.
The loss: Checks by Nairametrics showed that the telecom stock dropped by 10% to close at N1,980 per share from N2,200 which was the opening figure before the commencement of the day’s trading.
Further checks revealed that Airtel Africa closed the trading at N7.441 trillion in market capitalisation on the Nigerian Exchange (NGX) as against N8.267 trillion when the day’s trading activities began, hence posting a loss of N826 billion or 10%.
Analysts’ view
Analyst and Head of Research at FSL Securities Limited, Mr. Victor Chiazor, commenting on the development in an exclusive chat with Nairametrics, noted that investors are now more informed and engaged, and are seeking higher returns.
- “With many listed securities having already disclosed full-year earnings and dividends marked down, investors are opting to shift their positions from equities to the fixed income market due to the appealing yields available in that sector,” he said.
Also, the Group Managing Director of Crane Securities Limited, Mr. Mike Eze, linked the market downturn to investors capitalizing on profits following a notable bullish rally observed in recent times and also the monetary policy rate hike of 24.75% from 22.75%.
He said with the further interest rate hike, investors will navigate towards the fixed income space as there is no sentiment when it comes to investment.
- “The purpose is for high return and stability of capital. There is no sentiment attached to it. Investors are navigated towards fixed income space because it is not favourable. Considering the current CBN MPC announcement on further hiking the rate to 24.75%, there will be negative effects on the equity market.
- It is the only the conservative investors in the market that will retain their investments in the stocks while watching the trends,” he said.
Eze noted that the market is about information and with the recent announcement on the rate hike, there will be a further run on the stock market because investors are going to move to the fixed-income segment in order to reap high returns on their investments.
What you should know
Trading activities on the floor of the NGX opened the week in a negative note as the NGX All-Share Index weakened by 0.89% to close at 98,703.68 points.
Sell pressures in index heavyweight, AIRTELAFRI (-10.00%), alongside STANBIC (-2.80%) and TRANSCORP (-3.55%) offset gains in ZENITHBANK (+0.58%), GTCO (+7.61%), and TRANSCOHOT (+5.60%), giving rise to a weak performance.
Consequently, the ASI year-to-date (YTD) slipped to 32.00%, while the market capitalization lost N499.71 billion to close at N55.82 trillion.
Analysis of the day’s market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 26.10%.
A total of 421.73 million shares valued at N8.95 billion were exchanged in 10,624 deals. ACCESSCORP (+3.16%) led the volume and value chart with 98.24 million units traded in deals worth N1.76 billion.