Investors lose N2.3tr as pandemic takes toll on stock market

By Helen Oji
• Stakeholders seek appropriate coordination of stimulus packages
Uncertainty in the domestic and global economy, triggered by the devastating effect of the raging
COVID- 19 crisis have continued to hit hard on the equities sector of the Nigerian Stock Exchange (NSE), even as investors’ lose N2.3 trillion in one month
Specifically, market capitalisation of listed equities, which opened the month of March at N13.449 trillion, depreciated by N2.3 trillion to close at N11.100 trillion yesterday. The All-share index equally declined by 4,516.1 points or 21.2 per cent from 25, 816.57 to 21, 300.47 points.
This is despite impressive earnings and dividend announcements from listed companies. For instance, the tier-1 banks with an acronym- FUGAZ which is First Bank, United Bank of Africa (UBA), Guaranty Trust Bank (GTBank), Access Bank and Zenith Bank returned double-digit returns at the end of 2019 financial year.
First Bank’s parent company, FBN Holdings returned 24.4 per cent, the highest from Nigeria’s top five banks. Zenith Bank and United Bank Africa (UBA) have also both returned 18.7 per cent and 16.8 per cent respectively.
Unfortunately, the global and domestic economy has been grappling with Coronavirus pandemic. The seemingly improved performance and buying interest in financial services stocks, consumer and industrial goods of the NSE failed to push the market indices as sell-offs in large company shares dragged the key performance indices down.
Investors who spoke with The Guardian called for proper coordination of all interventions and palliatives to stem the virus from extending to the remote areas.
According to them, the country may have a bigger crisis to grapple with if the spread extends to remote areas and villages.They categorically stated that news of stimulus packages and expected implementation in other nations of the world have started reflecting on their stock markets that just suffered huge losses as it rebounded with big gains in recent days trading.
For instance, the President of Ibadanzone Shareholders Association of Nigeria, Eric Akinduro said: “The recent pandemic has really put the whole world into standstill and stock market is not immune to what is happening globally.
“The total lockdown in few days to come in some states might further depress the market. However for those that have cash or money to keep, this is the best time as many stocks with good fundamentals are selling at their 52 weeks low. What we are witnessing now is a phase that will soon pass and behind every tunnel there is always light.
He continued: “On the issue of donations, the Federal Government should realise that these people are donating to ameliorate the situation, so it should be used wisely. Political affiliation should be put aside for now to achieve our vision which is to get rid of this virus,” he added.
An independent investor, Amaechi Egbo said proper coordination of the stimulus packages, in form of donations and contributions would go a long way to curtail the spread of the virus.
“All manner of interventions must be coordinated. Proper coordination of these donations and contributions would ensure that we stem this virus from extending to villages and remote areas because we may have a bigger crisis to contend with if appropriate strategies are not adopted.”