Signed budget fails to lift stock market
The nation’s stock market closed on a negative note for the fifth straight session on Thursday, a day after President Muhammadu Buhari signed the 2018 budget.
The All-Share Index of the Nigerian Stock Exchange dropped by 1.17 per cent to close at 38,152.60 basis points, while the market capitalisation of listed equities fell to N13.82tn from N13.98tn on Wednesday.
Buhari finally signed the 2018 Appropriation Act on Wednesday, lamenting that the budget would be difficult, if not impossible, to implement because of the alterations members of the National Assembly effected on the document he submitted to them on November 7, 2017.
The stock market has been wobbling in recent months, with the market capitalisation losing N1.146tn last month as it fell to N13.802tn on May 31 from N14.948tn on April 30. The total value of listed equities peaked at N16.154tn in January.
Twenty-six stocks recorded losses on Thursday, with Honeywell Flour Mills Plc, Nigerian Aviation Handling Company Plc, Cement Company of Northern Nigeria Plc, Seplat Petroleum Development Company Plc and Jaiz Bank Plc emerging top losers.
Honeywell Flour Mills and NAHCo fell by five per cent each to close at N2.28 and N3.99 per share, respectively.
The CCNN saw its share price shed 4.76 per cent to close at N24; Seplat declined by 4.49 per cent to N685 per share; while Jaiz Bank lost 4.48 per cent to close at N0.64 per share.
Twenty-four stocks appreciated at the close of trading on Thursday, with Japaul Oil & Maritime Service Plc leading the pack, as it rose by 9.30 per cent to N0.47 per share.
Among the five top gainers were Custodian and Allied Insurance Plc, Mansard Insurance Plc, N.E.M Insurance Company Plc and Fidelity Bank Plc, which increased by 4.99 per cent, 4.91 per cent, 4.69 per cent and 4.59 per cent to close at N5.26, N2.78, N2.90 and N2.28 per share, respectively.
The Managing Director, Afrinvest Securities Limited, Mr Ayodeji Ebo, in a telephone interview with our correspondent, said since the nation’s stock market was not yet very efficient, “we don’t expect any major reaction by investors in the market” to the budget signing.
“In the interim, we don’t expect the signing of the budget to translate into improved performance for the market,” he stated.