Profit taking drags market performance down

Profit taking activities by some investors have been blamed for the continuous downturn been witnessed in the Nigerian Stock Exchange (NSE).

Detola Olukorede, an equity analyst at Investment Option, a fund management firm, said, “It is expected that investors will always want to take the little profits on their investments during festive season,” adding that this enables them to celebrate the season.

Mr. Olukorede said consequently, market performance was expected to fall during the period because “profit taking activities drags equities prices down.” Meanwhile, the Exchange market capitalisation of the 201 first-tier equities closed on Tuesday at N7.798 trillion after opening the day at N7.801 trillion, reflecting 0.04 per cent decline or N3 billion losses. The market had lost N8 billion after Monday’s trading session.

Multiverse, BankPHB, Intercontinental Bank, Skye Bank, and Guaranty Trust Bank were the most traded stocks on Tuesday.

Gainers decrease

A total of 34 stocks appreciated in price on Tuesday; lower than the 38 gainers recorded previous day, while 26 stocks depreciated in value; higher than the 25 recorded on Monday.

Cement Company of Northern Nigeria and Nigerian Aviation Handling Company topped the price gainers’ table with an increase of 65 kobo and 44 kobo on their opening prices of N14.00 and N9.37 per share. University Press and International Breweries followed in the chart with an increase of 32 kobo and 26 kobo, to close at N6.82 and N6.22 per share.

On the losers’ side, PZ Cussons and Cadbury Nigeria led the price losers’ chart with a loss of N1.14 and 44 kobo, to close at N31.45 and N26.06 per share respectively. UAC Nigeria and Costain West Africa followed with a decrease of 42 kobo and 34 kobo on their initial prices of N38.10 and N6.90 per share

Banking subsector leads

Trading activities in the Banking subsector on Tuesday maintained lead as the most active subsector with 223.69 million units valued at N1.28billion exchanged in 3,223 deals as against the 220.21 million units valued at N1.31billion exchanged in 2,900 deals recorded on Monday.

The volume recorded in the subsector was driven by transaction in the shares of BankPHB,

Intercontinental Bank, Skye Bank and Guaranty Trust Bank. The total volume of 141.71 million units valued at N722.49 million traded in the shares of the four stocks accounted for 34.34 per cent of the entire market volume and their value represented 28.67 per cent of the market’s value.

Market Outlook

However, in spite of the current downturn, Bismarck Rewane, Managing Director of Financial Derivatives Company Limited, a business consultancy firm, is optimistic that some of the reforms by the Exchange regulator will help improve investors’ confidence in the coming year.

Speaking at an executive meeting organised by Lagos Business School, last weekend, Mr. Rewane said that “stricter regulations for operators and participants in the capital market” will boost confidence next year. He said this will “encourage greater transparency and less of sharp practices” in the market.
Source:http://234next.com/