Investors in Airtel Africa Plc, one of the biggest telecoms companies listed on the Nigerian Exchange Group Plc (NGX), lost over N826 billion at the end of Monday’s trading session as the domestic market fell under sell pressure.
After posting notable gains on Friday, the market went back into a losing run as the benchmark index dropped 0.89% to end the day at 98,703.68 points.
The loss: According to Nairametrics’ checks, the telecom stock fell by 10% to close at N1,980 a share, down from N2,200, the opening price before the day’s trading began.
Further investigation revealed that Airtel Africa’s market capitalization on the Nigerian Exchange (NGX) finished at N7.441 trillion, down from N8.267 trillion when the day’s trading began, representing a 10% loss of N826 billion.
Analysts’ perspective
In an exclusive interview, Mr. Victor Chiazor, Head of Research and Analyst at FSL Securities Limited, discussed the development and pointed out that investors are now more engaged and knowledgeable and are looking for larger returns.
- “Investors are choosing to move their positions from equities to the fixed income market due to the enticing yields available in that sector, as many listed securities have already disclosed full-year earnings and dividends marked down,” he said.
Additionally, Mr. Mike Eze, the Group Managing Director of Crane Securities Limited, connected the market decline to investors hoarding profits after a noteworthy bullish rise that was recently witnessed, as well as the monetary policy rate hike from 22.75% to 24.75%.
He stated that since there is no sentiment in investing, investors will gravitate into the fixed-income area as interest rates continue to rise.
- “High return and capital stability are the goals. It is not associated with any sentiment. Due to its unfavorable characteristics, investors are drawn to the fixed-income market. The equities market will suffer in light of the recent CBN MPC announcement to raise the rate even higher to 24.75%.”
- “Only conservative investors in the market will keep their investments in stocks while keeping an eye on trends,” he stated.
Eze pointed out that information is power in the market, and that the recent announcement of a rate hike will spur additional buying in the stock market as investors shift to the fixed-income market to take advantage of the high returns on their investments.
What To Note
The week began negatively for trading activity on the NGX floor as the NGX All-Share Index fell by 0.89% to settle at 98,703.68 points.
A disappointing performance resulted from sell pressure in index heavyweight AIRTELAFRI (-10.00%), along with STANBIC (-2.80%) and TRANSCORP (-3.55%), offsetting gains in ZENITHBANK (+0.58%), GTCO (+7.61%), and TRANSCOHOT (+5.60%).
Consequently, the market capitalization dropped by N499.71 billion to end at N55.82 trillion, and the ASI year-to-date (YTD) decreased to 32.00%.
An examination of the day’s trading activity revealed that trade turnover ended up being larger than it had been in the previous session, with a 26.10% increase in transaction value.
A total of 421.73 million shares worth N8.95 billion were exchanged in 10,624 transactions. In deals valued at N1.76 billion, ACCESSCORP (+3.16%) had the most volume and value, with 98.24 million units traded.
