Investors in the equities sector of the Nigerian Exchange Limited (NGX) lost a cumulative N283 billion in the month of August.
This represents 1.07 per cent of the market value.
The overall market capitalisation of listed companies closed on August 31, 2022 at N26.880 trillion from N27.163 trillion when it opened for trading in August 2022.
The NGX All-Share Index depreciated by 1.07 per cent to close at 49,836.51 basis points on August 31, 2022 from 50,370.25 basis points it opened for the month’s trading.
Investors showed apathy towards stocks even though the price of many blue-chip firms fell below fair value and are trading at low prices, compared to their fundamentals.
In the month under review, the equities market witnessed a hike in the inflation rate (19.64 per cent as of July 2022), even as the Central Bank of Nigeria (CBN) increased its Monetary Policy Rate (MPR) to 14 per cent, in addition to scarcity of foreign exchange which has led to apathy from foreign investors.
The indicators combined to have a negative impact on the NGX indices closing negative in the month under review.
It was, however, not all gloom as the market maintained a positive performance in its Year-till-Date (YTD) performance, with investors recording a gain of N4.58 trillion.
There were also improved earnings and dividend announcements from listed companies in the review period.
A review of sectoral indices also showed that the NGX Industrial Index suffered the highest decline in August, dropping by 13.8 per cent to 1,777.14 basis points from 2,062.30 basis points it opened for trading. Oil & Gas Index index depreciated by 4.3 per cent to 532.15 basis points from 556.28 basis points it opened for trading in August.
NGX banking index added 2.4 per cent to close at 387.41 basis points from 378.21 basis points, while NGX Insurance Index rose by 7.9 per cent to close at 180.23basis points in August from 167.04 basis points it closed for trading in July.
The loss has been attributed to uncertainty in the global economy, prevailing macroeconomic challenges in the country and heightened fear ahead of the 2023 general election.
