Sophia Johnson
Tue, Sep 12, 2023 11:40 PM

NGX closes in the red as equities plunge following FTSE Russell downgrade

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NGX closes in the red as equities plunge following FTSE Russell downgrade
The Nigerian Exchange (NGX) closed in negative territory after equities fell by N294 billion due to the FTSE Russell downgrade of the Nigerian Stock Exchange. The downgrade prompted immediate selloffs, resulting in a plunge in equities. The All-Share Index (ASI) traded 0.80% lower, and the market capitalization of equities saw a loss of N294 billion. Several stocks experienced mixed trading sessions, with tier 1 banks recording negative sessions.

The Nigerian Exchange (NGX) closed in negative territory at the end of Tuesday's trading session as equities fell by N294 billion on the back of FTSE Russell ratings.

Recall, that Nairametrics reported that FTSE Russell, the global index provider, downgraded the Nigerian Stock Exchange from "Frontline" to "Unclassified Market." The reclassification, set to take effect on September 18, 2023, prompted immediate selloffs as equities took a plunge.

The All-Share Index (ASI) traded -0.80% lower to close at 66,760.20 index points as against 67,296.18 index points recorded in the previous day's trading session.

Likewise, the market capitalization of equities saw a loss of N294 billion to close at N36.538 trillion, -0.80% lower than the N36.832 trillion recorded in the previous trading session.

Market breadth closed negative as CWG (10.00%) led gainers, ETRANZACT (-10.00%) led losers while TRANSCORP was the most traded equity - by volume - at the end of today's session.

CWG, CHELLARAM, and VITAFOAM led the top gainer's chart as they all gained +10.00%, +10.00%, and +9.78% respectively.

Meanwhile, ETRANZACT, REGALINS, and NASCON led the top losers' chart as they lost -10.00%, -10.00%, and -9.96% respectively.

There was higher trading activity in terms of volume as 645.54 million units of shares were traded today compared to the 520.13 million traded from the previous day's session.

TRANSCORP led the chart in terms of volume as 87.82 million units were traded. UBA (75.85 million) and ACCESS HOLDINGS (69.45 million) rounded up the top 3 traded stocks for today.

In terms of value traded, GTCO (N1.33 billion) led the chart followed by ACCESS HOLDINGS (N1.05 billion) and UBA (N1.03 billion) to round up the top three.

Shares of stocks worth over one trillion (shoot) saw mixed results as MTN NIGERIA (-1.53%), ZENITH BANK (-3.45%), and GTCO (-1.41%) all recorded negative trading sessions.

BUA CEMENT, BUA FOODS, SEPLAT ENERGY, DANGOTE CEMENT, and AIRTEL AFRICA all closed flat.

Shares of tier 1 banks all saw negative trading sessions as GTCO (-1.41%), UBA (-0.36%), ZENITH BANK (-3.45%), ACCESS HOLDINGS (-4.06%) and FBN HOLDINGS (-0.28%) closed negative.

This downgrade and subsequent selloffs highlight the impact of international index providers on the Nigerian stock market. Such downgrades can lead to increased caution from foreign investors and negatively affect market sentiment.

It remains to be seen how the Nigerian Exchange will respond to this downgrade and work towards regaining its "Frontline" status in the future.

Overall, investors and market participants will closely monitor the developments in the Nigerian stock market as they adapt to the new classification and navigate the potential implications.

Source of content: OOO News 2023-09-12 News

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