Election fear: NSE trading volume nosedives by 42.38% in January

The volume of shares traded on the Nigerian Stock Exchange (NSE) in January dropped by 42.38%, which analysts have attributed to uncertainties surrounding the forthcoming elections.

Specifically, 6.24 billion shares worth N59.28 billion were exchanged in 80,888 deals by investors in January.

NAN reports that the turnover and volume during the period dropped by 42.38% and 16.16%, respectively when compared with figures achieved in December 2018.

The market posted a turnover of 10.83 billion shares worth N70.71 billion were traded in 59,132 deals in December 2018.

The financial services sector remained the most active in volume terms, accounting for 3.43 billion shares valued at N22.62 billion in 28,671 deals while conglomerates trailed with a turnover of 6.63 billion shares valued at N16.54 billion exchanged in 10,541 deals.

Diamond Bank emerged the most sought equity during the period in volume terms, with an exchange of 1.31 billion shares worth N2.72 billion in 3,918 deals.

GT Bank came second with 469.59 million shares worth N15.24 billion in 5,775 deals.

Transcorp listed under the conglomerates came third with a total of 288.76 million shares worth N334.33 million transacted in 2,476 deals, while UACN traded 21.09 million shares valued at N184.93 million achieved in 934 deals.

Commenting on the data, Ambrose Omordion, chief operating officer at InvestData Limited, attributed the drop in the activities of the stock market during the review period to cautious trading ahead of this month’s election.

He said the dominance of Diamond Bank in the activity chart was due to its proposed merger with Access Bank, saying the proposed merger boosted the demand for the bank’s shares.

According to him, the proposed merger entails that Access Bank acquires the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a scheme of merger.