NGX records N638bn loss, first in New Year

The market capitalisation of the Nigerian Exchange Limited depreciated for the first time in the New Year.

At the close of trading on Wednesday, the eight-day rally in the market was halted as the market cap dipped by about N638bn to close at N44.885tn. This is coming a day after the market cap crossed the N45tn milestone.

Although the benchmark index of the exchange, the All-Share Index remained above 80,000 points, it shed 1,167.46 points or 1.40 per cent to close at 82,024.38 on Wednesday.

Impacted by the depreciation were banking stocks, most of which suffered a loss except for Jaiz Bank which defied the trend to appreciate by 5.40 per cent to N2.93 and Stanbic IBTC Holdings which closed flat.

Meanwhile, the market capitalisation of Access Holdings Plc and First Bank of Nigeria Holdings dropped below N1tn, a day after the lenders crossed the milestone. They closed the market with a capitalisation of N989bn and N926bn, respectively.

The downturn in the equity market comes a day after the anti-graft agency, the Economic and Financial Crimes Commission, questioned some banks’ Managing Directors over a fraud that was uncovered at the Ministry of Humanitarian Affairs and Poverty Alleviation.

The major drivers of the day’s market were the stocks of indigenous conglomerate, Transnational Corporation Plc, AccessCorp, United Bank for Africa, Jaiz Bank and Zenith Bank.

Market Breadth which is the measure of investors’ sentiment was negative resulting in 13 gainers and 61 losers.

The gainers were led primarily by stocks of Cadbury Plc which gained 9.92 per cent to N19.95 per unit. On Tuesday, the consumer goods company revealed plans to seek shareholders’ approval to convert a N7.036bn loan from its parent company, Cadbury Schweppes Overseas Limited, to equity.

In an explanatory statement on the proposed debt-to-equity conversion filed with the NGX, the company revealed that between February 2021 and September 2023, Cadbury Schweppes Overseas, loaned $23m to Cadbury Nigeria to help settle outstanding third-party loans which the company had obtained to fund its raw material imports and other input costs.

However, due to the foreign exchange challenges in the country, it was unable to meet its debt obligations, which led the board to propose the debt-to-equity conversion plan.

Other gainers include VeritasKap which gained 9.76 per cent to close at N0.45, Linkage Assurance gained 8.70 per cent to close at N1.50, Transcorp Hotel gained 7.24 per cent to close at N100 per unit and Prestige Assurance gained six per cent to close at N0.53 per unit.

The losers’ chart was led by Chams Holdings, Cornerstone Insurance, FTN Cocoa, May & Baker, Caverton and Consolidated Hallmark Holding Plc, which lost 10 per cent each to close at N2.16, N1.80, N1.98, N5.49, N2.07 and N1.35 per unit, respectively.

The volume and value drivers of the day’s market trend were led by stocks of Transcorp, AccessCorp and Guaranty Trust Holding Company Plc.

Despite the downturn in the market, the transaction volume for the day rose to 1,641.28 million, from the previous day’s volume of 1,409.85 million units of shares valued at N25.37bn from 20,223 deals executed. The number of stocks traded on Wednesday stood at 123.