Stock market: Prices on the decline
August 25th, 2006 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
Ogbuotobo Chuks
In what would seem quite unbelievable and unexpected, the stock market in the fourth week of August, 2006 began on a rather bearish note. How surprising indeed.
Prior to this week, the market had experienced one of the best times ever to be recorded in a long time. The market was bullish for three straight weeks causing investors much delight and fulfillment. This euphoria was further deepened by the invasion of the stage by Pension Fund Administrators (PFA’s) who by investing 25 percent of pension funds caused the prices of equities of blue chip companies to climb northwards.
However, this trend in a rather unprecedented manner changed gear as prices of these blue chip companies started to experience a decline, as well as market capitalization and index.
On Tuesday , market capitalization which had crossed N4trillion the week before dipped 3.65percent to N3.877billion while index which made a historic high above the 35,000 mark, went down 3.65 percent to sit at 33,512.32.
The number of price losers doubled that of gainers. Stock marketnigeria.com believes this trend was characterised by the magnitude of funds that was pumped into the market. Upon increase in the equities of blue chip companies, most investors decided to shed some portfolio weight, thereby marking supply exceed demand. This singular act therefore pushed the prices down thereby making the market bearish.
The losers chart was topped by Nestle (-N12.55), Total Nig.Plc (-N10.00). Others include Guinness Nig.plc (- N3.76), Cadbury (-N3.32), Nigerian bottling company plc (-N2.67), Texaco (- N4.51),Conoil (-N4.07) among others.
The gainers chart was led by Julius Berger Nig. Plc (+N1.71) ,CAP plc (+N0.97). Others were Benue cement company (+N 0.63), Mobil oil Nigeria (+N0.45), Access Bank Plc (+ N0.15) and others.
NB. The figures above were as at the end of trading on 22/08/06.
mail enquiries to chuks@stockmarketnigeria.com
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