NGX Loses N1.47 Trillion in a Day as Dangote Cement Falls 5.5% and Banks Slip

Nigerian stocks opened the week with their sharpest drop in days. The NGX All-Share Index (ASI) lost 2,261.39 points, or 0.91%, on Monday 19 October to close at 245,278.34, and the market's total value fell by N1.47 trillion. Dangote Cement, the exchange's heaviest stock, did most of the damage, while profit-taking hit the big banks.

The figures come from the Nigerian Exchange's daily data as compiled by Nairametrics analyst Israel Ojoko. Monday's close was the lowest of the past five sessions, down from a weekly high of 247,707.13 on 15 October.

NGX market value by the numbers

• All-Share Index: 245,278.34, down from 247,539.73 (-0.91%)
• Market capitalisation: N159.26 trillion, down from N160.73 trillion
• Value lost: N1.47 trillion
• Volume: 349.34 million shares, up 35.58% from 257.67 million
• Deals: 43,115, up 34.85% from 31,972

Higher volume and more deals on a falling day point to active selling rather than a quiet drift lower. Investors were taking money off the table, not simply sitting out.

Dangote Cement drags the index

Dangote Cement fell 5.50%, losing N58.70 to close at N1,008.00. With a market value above N17 trillion, it is large enough that a move of that size shifts the whole index. The NGX Industrial Index, where the cement maker carries the most weight, dropped from 10,442.95 to 10,140.51 points.

The stock is now just above the N1,000 mark. Whether it holds there is the main thing equity traders will watch this week, given how much of the ASI's direction depends on it.

Banks hit by profit-taking

The NGX Banking Index fell from 2,532.47 to 2,497.01. Losses among the large lenders included:

• Ecobank Transnational: -4.76%
• Wema Bank: -3.55%
• UBA: -2.33%
• Access Holdings: -1.93%
• Zenith Bank: -1.59%
• GTCO: -1.44%

Bank shares had been among the best performers after the Central Bank of Nigeria cut its policy rate by 350 basis points to 23% on 22 September, its largest cut since 2006. Monday's selling looks like investors locking in some of those gains rather than a change in view on the sector.

Top gainers and losers

Gainers

1. Multi-Trex Integrated Foods: +10.00% to N0.66
2. Critical Minerals Financing Corp: +9.97% to N3.64
3. Austin Laz & Company: +9.93% to N3.21
4. Thomas Wyatt Nigeria: +9.92% to N2.66
5. Neimeth International Pharmaceuticals: +5.88% to N8.10

Losers

1. Vitafoam Nigeria: -10.00% to N174.60
2. Cutix: -9.79% to N2.12
3. Omatek Ventures: -9.38% to N1.45
4. International Energy Insurance: -6.48% to N2.02
5. Linkage Assurance: -6.29% to N1.64

The gainers were mostly low-priced small caps hitting or nearing the 10% daily limit. The fall in Vitafoam, a much larger share at N174.60, was the most notable move among the losers.

How the other indices moved

• NGX Premium Index: 30,927.80 to 30,371.64
• NGX 30: 9,101.27 to 9,019.16
• NGX Insurance Index: 1,079.57 to 1,069.94
• NGX Growth Index: 26,888.42 to 26,765.65
• NGX Consumer Goods Index: 4,036.97 to 4,030.50
• NGX Oil/Gas Index: 6,194.00 to 6,190.11

Consumer goods and oil and gas stocks held up well. The NGX Sovereign Bond Index was flat at 661.50 and the NGX Commodity Index at 1,937.41.

What to watch next

The pullback comes in a busy week for Nigerian assets. The Debt Management Office planned a N1.75 trillion bond offer on 19 October, part of N5.75 trillion of bond sales scheduled for the fourth quarter, and higher bond supply can pull money away from equities. Inflation fell to 14.63% in September, which leaves real interest rates high and keeps fixed income attractive.

Last week the market swung the other way: on 14 October the NGX rebounded and recovered N103.9 billion as oil and banking stocks rose. One down day does not change the trend, but with Dangote Cement near N1,000 and banks under profit-taking, the next few sessions will show whether buyers come back.