The Central Bank of Nigeria decision to suspend banks dividend payout, directors bonuses and new foreign investments has continued to impact negatively on the stock market as the Nigerian equities market yesterday opened the week on a bearish note, wiping N108 billion off capitalisation.
The all-share index (ASI) lost 170.77 points, representing a decline of 0.15 per cent to close at 115,258.77 points.
Also, market capitalisation declined by N108 billion to close at N72.68 trillion.
The downturn was driven by price depreciation in large and medium capitalised stocks amongst which are Northern Nigeria Flour Mills (NNFM), Conoil, Zenith Bank, Oando and United Bank for Africa (UBA).
On market outlook, Afrinvest Limited said: “We expect the market to extend its bearish trend, as investors shift focus to the CBN T-bills auction, where expectations of stable yields may dampen appetite for equities.”
Vetiva Dealings and Brokerage said: “While we still expect to see some downward pressure in tomorrow’s market, volume flows remain healthy, with activity trending in line with rising prices, a key confirmation of institutional participation. As it stands, the ASI is in price discovery mode, and sentiment remains constructive as long as it holds above 110,000pts.”
Market breadth was negative, with 19 gainers against 45 decliners. Guinea Insurance emerged the highest price gainer of 10 per cent to close at 77 kobo. Ellah Lakes followed with a gain of 9.93 per cent to close at N4.76, while Legend Internet rose by 9.87 per cent to close at N7.79, per share.
May & Baker Nigeria was up by 9.74 per cent to close at N16.9, while Fidson Healthcare appreciated by 9.64 per cent to close at N42.10 kobo.
On the other side, NNFM led the losers’ chart with 10 per cent to close at N101.30 kobo. C&I Leasing followed with a decline of 9.68 per cent to close at N4.20 kobo, while University Press shed 9.09 per cent to close at N5.
FCMB Group depreciated by 8.59 per cent to close at N9.05, while Learn Africa down by 8.43 per cent to close at N3.80 kobo.
The total volume traded decreased by 22.7 per cent to 721.751 million units, valued at N22.01 billion, and exchanged in 22,100 deals. Transactions in the shares of Access Holdings led the activity with 92.702 million shares worth N1.905 billion.
United Bank for Africa (UBA) followed with an account of 91.363 million shares valued at N3.085 billion, while Zenith Bank traded 76.848 million shares valued at N3.556 billion.
Fidelity Bank traded 49.995 million shares worth N883.988 million, while Guaranty Trust Holding Company (GTCO) traded 40.456 million shares worth N2.849 billion.
Recall that the CBN had suspended the dividend payments of seven Nigerian banks as part of a regulatory measure to strengthen the financial health of the banking sector.
Under this forbearance regime, the CBN has directed the banks to halt dividend payouts, executive bonuses, and foreign investments until their capital adequacy can be independently verified.
This move, according to the apex bank is aimed at ensuring the affected banks conserve capital and prioritise financial stability over short-term shareholder returns.
According to data by Renaissance Capital Africa, the combined forbearance-related obligations of the seven banks are $4.01 billion.
