07-11-2018, 12:41 PM
Bank stocks post N320bn loss in Q2
![[Image: Trading-floor-of-the-NSE-stocks.png]](https://newtelegraphonline.com/wp-content/uploads/2017/04/Trading-floor-of-the-NSE-stocks.png)
Investors in banks quoted on the main board and premium board of Nigeria’s stock market reported a cumulative loss of about N320 billion in the second quarter ended June (April-June) 2018, following sustained profit takings despite fair earnings results, improvement of micro-economy and gradual stability being recorded in foreign exchange.
Checks by New Telegraph revealed that the stocks recorded a loss of N320 billion or 8.63 per cent to close at N3.389 trillion in market capitalisation on the last trading day of June 30. This is against opening figure of N3,709 trillion at the closing of trading on March 31.
Investors remained bearish in the equities market, as the market capitalisation and All Share Index (ASI) recorded year-to-date loss of about N1.126 trillion or -7.77 per cent.
Managing Director, Crane Securities Limited, Mr. Mike Eze, attributed the depletion in the price of securities in the Nigerian stock market to profit taking by investors to increase capital gains, speculations and market hearsay on political tension in Nigeria.
Eze, however, believes the speculation about the political tension in the country will fizzle out very soon, as it was just a mere rumour, adding that the effect of the political tension will be more brazen at the turn of 2019.
Nonetheless, despite an improving macro-economic environment and a semblance of policy stability, Nigeria’s financial markets would likely be steered by the fallout of electoral activities and rising global interest rates, financial analysts at Vetiva Research have said.
The experts, in their H2 outlook, said the equity market has been hit by pre-election jitters, with foreign investors moving to the side-lines and is expected to perform tepidly in H2’18.
They noted that comparable multiples with peers suggest the Nigerian equity market remains undervalued and they maintain a strongly positive post-election outlook on Nigerian equities.
“Meanwhile, as late budget passage, pre-election spending, and food price pressure induce higher inflation at year-end, we project a 100bps yield uptick in H2’18,” the analysts said.
“Beyond 2018, government’s shift from the domestic debt market, Nigeria’s potential re-inclusion into the JP Morgan Bond Index and retreating inflation provide a case for longer-term yield moderation.
“Many of our 2018 forecasts have been downgraded, though remain above 2017 estimates. 2018 GDP growth is projected at 1.9 per cent y/y (previous: 2.4 per cent y/y), compared to 0.9 per cent y/y in 2017.
The dimmer picture begins with the oil sector as infrastructure integrity issues prevent Nigeria from producing at capacity, whilst oil prices are expected to trend slightly lower in H2’18 on the back of rising output.
“We expect to see some policy support from the recently passed 2018 budget (June 20), though the imminent 2019 elections may complicate its effect.
Indeed, we expect elections to dominate near-term activities, with election spending boosting the economy through government and consumer spending, but also inducing greater inflationary pressure.
“The latter effect underpins our view that monetary policy status quo will persist until the elections.
Impending elections are also likely to induce greater economic uncertainty and distract policy and governance at the tail-end of the year, neither of which is positive for confidence or investment. In terms of electoral activities, we do not anticipate any unusual changes to peace and stability, even as we expect militant activity to increase ahead of the 2019 polls.”
Besides, they said: “The Nigerian economy did not fare as well as expected in the first half of 2018 (Q1’18 GDP growth: 2.0 per cent y/y vs. Vetiva and Consensus forecasts of 3.4 per cent y/y and 2.6 per cent y/y, respectively).
Weakness in the services sector (c.60 per cent of Nigerian economy) was unsurprising in light of still-weak consumer wallets, but the slowdown in agriculture was a real concern – particularly as it may be reflecting the negative impact of escalating violence in the Middle Belt region
https://newtelegraphonline.com/2018/07/b...oss-in-q2/
Investors in banks quoted on the main board and premium board of Nigeria’s stock market reported a cumulative loss of about N320 billion in the second quarter ended June (April-June) 2018, following sustained profit takings despite fair earnings results, improvement of micro-economy and gradual stability being recorded in foreign exchange.
Checks by New Telegraph revealed that the stocks recorded a loss of N320 billion or 8.63 per cent to close at N3.389 trillion in market capitalisation on the last trading day of June 30. This is against opening figure of N3,709 trillion at the closing of trading on March 31.
Investors remained bearish in the equities market, as the market capitalisation and All Share Index (ASI) recorded year-to-date loss of about N1.126 trillion or -7.77 per cent.
Managing Director, Crane Securities Limited, Mr. Mike Eze, attributed the depletion in the price of securities in the Nigerian stock market to profit taking by investors to increase capital gains, speculations and market hearsay on political tension in Nigeria.
Eze, however, believes the speculation about the political tension in the country will fizzle out very soon, as it was just a mere rumour, adding that the effect of the political tension will be more brazen at the turn of 2019.
Nonetheless, despite an improving macro-economic environment and a semblance of policy stability, Nigeria’s financial markets would likely be steered by the fallout of electoral activities and rising global interest rates, financial analysts at Vetiva Research have said.
The experts, in their H2 outlook, said the equity market has been hit by pre-election jitters, with foreign investors moving to the side-lines and is expected to perform tepidly in H2’18.
They noted that comparable multiples with peers suggest the Nigerian equity market remains undervalued and they maintain a strongly positive post-election outlook on Nigerian equities.
“Meanwhile, as late budget passage, pre-election spending, and food price pressure induce higher inflation at year-end, we project a 100bps yield uptick in H2’18,” the analysts said.
“Beyond 2018, government’s shift from the domestic debt market, Nigeria’s potential re-inclusion into the JP Morgan Bond Index and retreating inflation provide a case for longer-term yield moderation.
“Many of our 2018 forecasts have been downgraded, though remain above 2017 estimates. 2018 GDP growth is projected at 1.9 per cent y/y (previous: 2.4 per cent y/y), compared to 0.9 per cent y/y in 2017.
The dimmer picture begins with the oil sector as infrastructure integrity issues prevent Nigeria from producing at capacity, whilst oil prices are expected to trend slightly lower in H2’18 on the back of rising output.
“We expect to see some policy support from the recently passed 2018 budget (June 20), though the imminent 2019 elections may complicate its effect.
Indeed, we expect elections to dominate near-term activities, with election spending boosting the economy through government and consumer spending, but also inducing greater inflationary pressure.
“The latter effect underpins our view that monetary policy status quo will persist until the elections.
Impending elections are also likely to induce greater economic uncertainty and distract policy and governance at the tail-end of the year, neither of which is positive for confidence or investment. In terms of electoral activities, we do not anticipate any unusual changes to peace and stability, even as we expect militant activity to increase ahead of the 2019 polls.”
Besides, they said: “The Nigerian economy did not fare as well as expected in the first half of 2018 (Q1’18 GDP growth: 2.0 per cent y/y vs. Vetiva and Consensus forecasts of 3.4 per cent y/y and 2.6 per cent y/y, respectively).
Weakness in the services sector (c.60 per cent of Nigerian economy) was unsurprising in light of still-weak consumer wallets, but the slowdown in agriculture was a real concern – particularly as it may be reflecting the negative impact of escalating violence in the Middle Belt region
https://newtelegraphonline.com/2018/07/b...oss-in-q2/