With over N1 trillion loss suffered by stock market investors in July, shareholders have urged the Federal Government to create grant incentives to listed firms to halt the slide.
The shareholders also blamed the worrying trend on massive selloffs induced by poor corporate performance, the lingering foreign exchange instability and other macroeconomic challenges.
The shareholders also warned that if this trend of continued losses by highly capitalised firms due to naira devaluation is not urgently tackled, more listed firms may exit the country this year, a situation that would compound the nation’s unemployment woes. TransNational Corporation and Guinness opened last month at N13 and N67 and closed at N11.20 kobo and N63.50 kobo last Friday. International Breweries, Nigerian Breweries, Vitafoam, Unilever and Fidson reopened the month of July at N4.33 kobo, N29.50 kobo, N18, N18 and N14.95 kobo to close last week Friday at N4.20 kobo, N26, N17.50 kobo, N16.86 kobo and N14.75 kobo.
Analysts at Codros Capital said while the ongoing H1, 2024 earnings season is expected to dictate the market’s direction over the short term, the bearish sentiments are expected to remain the key theme as investors remain cautious and continue to exhibit weak appetite for Nigerian tickers. The major consumer goods companies – Nestle, BUA, PZ Cussons, Dangote Sugar, Unilever, Cadbury, Guinness and Nigerian Breweries recorded combined FX losses amounting to N839.24 billion in the 2023 financial year.
“When this trend continues, investors will be compelled to move their investments to a more stabilised environment and that is the reason for the recent selloff witnessed in the market. Total deposits of Nigerian commercial banks have increased to N136 trillion in the first quarter of 2024 from N115 trillion recorded on December 2023, representing additional new deposits of N21 trillion.
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