Dangote Cement Plc is the most capitalised stock on the NSE, and accounts for two thirds of the total market capitalization.
The Lagos bourse had been on a gaining streak for two weeks since Monday, May 22, 2017, with the stock market hitting its best point since 2014.
Some of the fundamental drivers of the bullish run by the NSE include the return of Foreign Portfolio Investors (FPIs), the gains in the banking sector of the market and the appreciation in the share price of some highly capitalized stocks such as Dangote Cement, Guaranty Trust Bank (GTB) and others.
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On Tuesday, June 6, 2017, the NSE’s All-Share Index (ASI) dropped by 1.16 percent, as market capitalisation drawback to N11.131 trillion from N11.212 trillion posted on Monday, June 5, 2017. The Market shredded N81 billion
The News Agency of Nigeria also reports that ASI dropped to 32,200.38 after opening the trading day with 32,578.38, indicating a loss of 378 points or 1.16 per cent.
According to Dolapo Ashiru, Managing Director/ CEO at Lead Securities & Investment Limited: “in principle, the capital market bullish run can only last for ten days,” hence the loss experienced by the market is normal.
Analysts from Afrinvest Securities also noted that: “Quite in line with our expectation, investors resorted to profit-taking on some value stocks that witnessed continuous appreciations during the bullish run.”
“Notwithstanding, we expect the profit taking to be transient as market breadth remains positive – reflecting subsisting strong appetite for equities across board – while performance continues to be dictated by improvements in the macroeconomic fundamentals,”
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Among the market losers for the day were Dangote Flour, Mobile Oil, Unilever Plc and Conoil Plc.
In spite of the drop in market indices, the volume of shares traded increased by 11.63% as 744.99 million shares valued at N6.52 billion was traded in 7,841 deals.
