Dangote, Elumelu, Others Lose Over N200bn in 4 Hours As Stocks Market Reacts to Nigeria Downgrade

Dangote, Elumelu, Others Lose Over N200bn in 4 Hours As Stocks Market Reacts to Nigeria Downgrade

  • The recent demotion of Nigeria from Frontier to Unclassified Market Status by FTSE Russell has created a negative sentiment in the Nigerian stock market
  • This sentiment led to a loss of over N200 billion for Nigeria's stocks investors after 4 hours of trading on the Nigerian Exchange
  • Aliko Dangote, Femi Otedola, Tony Elumelu, and Jim Ovia are some of the top stock investors who suffered huge losses

Nigeria’s stock market continued once again closed trading on the negative on Tuesday, September 12, 2023.

The market sentiment was not helped by FTSE Russell, a global index provider and financial data company, reclassifying the Nigerian Stock Exchange from 'Frontline' to 'Unclassified Market,' citing the country's forex challenges.

Nigeria stock traders
Stock market traders lose over N200 billion. Photo credit: NGX
Source: Facebook

The reclassification, set to take effect on September 18, 2023, was a wake-up call for stock investors looking to protect their recent profits.

Analysts at Chapel Hill Denhaam a investment banking management firm led by Tajudeen Ibrahim, explained that this is not the first time a global index is considering a downgrade to the Nigerian equities market.

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He noted that MSCI Index in June 2022 announced a decision to reclassify the Nigerian market from the Frontier to Standalone market.

"The FSTE reclassification comes at a time when the equities market has surpassed its 2008 pre-crisis levels, and yet has several stocks with cheap valuations on the back of strong profitability outlook.
"However, It is also worth noting that foreign investors' participation in the market has dropped significantly to 8.6% of the total value traded so far in 2023 compared to 48.9% in 2019."

How Nigeria's Stock Market Performed on Tuesday after FTSE downgrade

Legit.ng's analysis showed that on Tuesday, Nigerian Exchange Limited (NGX) All-Share Index (ASI) dropped by 0.80% to 66,760.2 points compared to the previous day's closing figure of 67,296.18 points.

Also, the equities market capitalization dropped to N36.538 trillion at the close of trading on Tuesday, September 12 from N36.831 trillion market capitalization reported on Monday.

Tuesday's market capitalization indicates a loss of N293 billion for stock investors after 4 hours of trading.

Snapshot of the market

Here is a snapshot of how the market closed on Tuesday.

These stocks were the most actively traded by investors in 10,554 deals, with a total of 645,540,839 shares exchanged, valued at N11.014 billion.

  • Transcorp
  • UBA (United Bank for Africa)
  • Access Corporation
  • Fidelity Bank
  • GTCO (Guaranty Trust Bank)

Stocks with highest decline

Etranzact dropped from the preceding day high of N9 to N8.10, losing 90kobo or 10percent.

NASCON also dipped from N52.20 to N47, losing N5.20 or 9.96percent, followed by Dangote Sugar which dropped from N57.75 to N52, down by N5.75 or 9.96percent.

How much some billionaires lost on Tuesday

Nigerian billionaires recorded significant losses from their investments on Tuesday. For example, Aliko Dangote lost N50.29 billion as the value of his shareholdings in Dangote Sugar dropped from N506.54 billion on Monday to N456.24 billion on Tuesday.

Similarly, Tony Elumelu, the highest shareholder of UBA, also suffered a loss of N153.52 billion on Tuesday as the bank's shares dropped, reducing the market value of his stake to N31.29 billion.

Zenith Bank chairman Jim Ovia makes over N13bn in 5 hours, buys more shares

In another report, Legit.ng revealed that Jim Ovia, the owner of Zenith Bank, has purchased additional shares in his bank.

The new shares were purchased after he made over N13 billion from President Tinubu's inaugural speech.

He made money between 9:30 and 14:30, the trading hours of the Nigerian stock market.

Source: Legit.ng

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