Moves by banks to comply with the Central Bank of Nigeria’s directive to reduce their exposure to the capital market to 10 per cent is responsible for the current bearish trend at the Nigerian Stock Exchange, analysts have said.

 

According to analysts at Meristem Securities, the series of sell-offs show banks‘ move to correct their margin lending position in compliance with the CBN‘s regulation of 10 per cent exposure threshold prior to September 1, 2010.

 

Specifically, the NSE‘s All Share Index fell by 0.22 per cent or 53.38 points, from 24,274.51 points to close at 24,221.13 points.

Similarly, the market capitalisation of the listed equities dropped by 0.22 per cent or N13bn to close at N5.92tn, from N5.94tntn on Friday.

The NSE-30 Index also depreciated by 0.45 per cent or 4.53 points to close at 1,007.88 points, as against 1,012.41 points recorded last week.

 

Other sectoral indices, such as the banking index, fell by 0.04 per cent or 0.13 points to close at 355.30 points, from 355.43 points.

The insurance index closed at 171.68 points, after a 1.66 per cent or 2.80 points increase from 168.88 basis points.

 

Turnover was driven by activities in the banking sub-sector, as it accounted for 70 per cent of total turnover. The shares of Guaranty Trust Bank, First Bank of Nigeria Plc and Access Bank Plc drove volume in the sub-sector.

 

The insurance sub-sector followed on the activity chart, accounting for seven per cent of total turnover.

At the close of activities, investors exchanged 194.16 million shares, valued at N1.88bn in 5,874 deals. A total of 33 stocks recorded price gains, while 26 stocks depreciated in value.

 

Northern Nigeria Flour Mills Plc led the gainers’ chart with an increase of 4.5 per cent or N2.02 to close at N47.00 per share, while Flour Mills Nigeria Plc gained 2.7 per cent or N1.90 to close at N71.90 per share. CAP Plc followed on the gainers‘ chart with a five per cent or N1.59 gain, to close at N33.51 per share.

 

Nigerian Breweries Plc recorded the highest loss, down by 4.4 per cent or N3.15 to close at N69.00 per share. PZ Cussons Nigeria Plc followed on the losers‘ chart with a 4.8 per cent or N1.67 decline to close at N33.33 per share, while Ashaka Cement Plc also fell by 2.5 per cent or 50 kobo to close at N19.50 per share.

 

Source: The Punch