Stock Market Remains Bearish
Trading session in NSE The Nigerian stock market trended further downward yesterday as investors’ risk appetite remained weak. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) declined by 0.59 per cent, from 38,038.79 to close at 37,813.43, while market capitalisation shed N72 billion to close at N11.975 trillion. Market analysts said the decline in share prices, which is for the fourth day running might continue for more days as equities market saw temporary funds flow to fixed income market were yields are appreciating due to the implementation of the 50 per cent cash reserve requirement (CRR) on public sector deposits. The ASI had declined by 1.00 per cent last week that the market opened for only three days. Analysts had said the spike in interbank rates would boost demand for fixed income instruments, a development that would attract funds from equities market. Despite assurance from regulators that the policy will not negatively affect banks on the long run, investors have been cautious in demanding for banking stocks at the market. Consequently, only three banking stocks appreciated while 10 depreciated. Zenith Bank led the banks on the gainers’ table with 17 kobo to close trading, trailed by Sterling Bank Plc with 10 kobo, while Unity Bank Plc managed a one kobo gain. On the losers’ table, Guaranty Trust Bank Plc led the banking stocks with 67 kobo, followed by United Bank for Africa Plc with N43 kobo. Union Bank of Nigeria Plc and FBN Holding Plc shed 37 kobo and 30 kobo respectively. Commenting on the market outlook for the week, analysts at Meristem Securities Limited said they expected market direction to be influenced by the perceived impact of increased CRR on banks’ earnings going forward. “With spikes in interbank rates and the likely impact on yields on fixed income instruments, we may see temporary funds flow from equities market as investors move to benefit from high yields,” they said.