The value of Nestle Nigeria Plc, Nigerian Breweries Plc, Stanbic IBTC Holdings Plc and seven others stocks depreciated by N122.2 billion on the Nigerian Exchange limited (NGX) following investors profit-taking in anticipation of weak corporate earnings, among other factors.
Other stocks that performed poorly in January were; Cutix Plc, Berger Paints Plc, C&I Leasing Plc, Unilever Nigeria Plc, University Press Plc, UACN Plc and NEM Insurance Plc.
THISDAY analysis of market activity during the period revealed that the companies lead top 10 losers in January 20221 amid significant growth in the stock market in the month under review.
Nestle Nigeria Plc, which is on the main board of the NGX witnessed aggressive profit taking by investors, followed by NEM Insurance Plc and Nigerian Breweries Plc.
The value of Nestle Nigeria dropped by N96.31 billion in January when its stock price depreciated by N121.50 to N1,435 at the end of January trading on the bourse.
It means if an investor invested N1 million in Nestle Nigeria shares at the beginning of 2022, he has lost N78,000 investment as the Fast-moving Consumer Good (FCMG) company’s stock depreciated by 7.8 per cent in value.
Similarly, investors’ investment in Nigerian Breweries dropped by N12.5billion as its stock price depreciated by 3.1 per cent to close January at N48.45 per share from N50 per share it opened for trading in 2022.
Among notable stocks that recorded decline in value were NEM Insurance with a decline of N4.06 billion, Stanbic IBTC Holdings and Unilever Nigeria Plc which dropped by N3.24 billion and N2.87billion, respectively in January 2022.
Analysts told THISDAY that most highly capitalised stocks like Nestle Nigeria, among others, often record decline not because anything is happening to the company.
The CEO of Wyoming Capital & Partners, Mr. Tajudeen Olayinka said: “It might be related to liquidity challenges that impacted negatively on price. Most of these stocks are not liquid in terms of investors demanding for them. Investors might be willing to exit due to one reason or the other.”He maintained that Stanbic IBTC Holdings nine months unaudited result and accounts sent a wrong signal, leading to profit taking by investors.He said, “Many investors were not impressed with the bank’s nine months result and accounts. So, they decided to take profit, leading to downward movement in the stock price of Stanbic IBTC Holdings. However, the downward movement of Stanbic IBTC Holdings stock is temporarily.”Stanbic IBTC Holdings had announced 40 per cent […]