Market Nosedives on MSCI’s Delisting of Nigeria

The Nigerian bourse started the week in the red zone as the All Share Index tumbled 2.7% closing at 24,649.39 points today on MSCI’s announcement that Nigeria may be excluded from its frontier market index as a result of the deterioration of foreign exchange market liquidity in Nigeria. This coming about six months after JP Morgan kicked out Nigeria from its Bond index.

Market capitalisation contracted N230.5bn to N8.5tn. Today’s performance was broadly panic selloffs in bellwethers like DANGCEM (-4.8%), NIGERIAN BREWERIES (-4.5%) and ZENITH (-4.2%). Market activity was however mixed as volume traded inched 0.8% higher while value traded declined 44.6% to close at 225.3m units and N750.2m respectively.
Banking Index Down 3.8%
The Banking index recorded the most declined by sector, down 3.8% as 10 banking tickers trended southwards with UBN (-9.6%), ETI (-4.9%), UBA (-4.9%), ZENITH (-4.2%) and GUARANTY (-2.1%) being the most hit.

The Industrial and Consumer Goods indices depreciated 2.8% and 1.7% as a result of selloffs in DANGCEM (-4.8%), NIGERIAN BREWERIES (-4.5%), DANGSUGAR (-0.9%), HONEYWELL (-4.3%). The Insurance index however appreciated 1.6% on gains in MANSARD (+4.8%), CONTINSURE (+4.2%) and CUSTODIAN (+2.5%). The Oil & Gas index inched 2bps higher buoyed by 0.3% northwards movement in OANDO.
Panic Selling May Continue Tomorrow
Investors’ sentiment remained weak from the last trading session of last week as Market breadth (advancers’/decliners’ ratio) closed at 0.6x on the back of 14 advancing stocks against 25 declining stocks. CAVERTON (+4.9%), MANSARD (+4.2%) and NASCON (+4.8%) topped the gainers’ list while NIG-GERMAN (-9.7%), UBN (-9.6%), FIDSON (-9.4%) topped the losers’ list.

The disturbing news on MSCI delisting Nigeria from its Frontier market index is expected to pull the index into another episode of downtrend as the currency market challenges continue to hammer investors’ confidence. We expect panic selling to likely persist tomorrow as the market digest details of MSCI’s notification.