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Sell pressure ahead of MPC meeting triggers high stock volatility

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Investors lose N512b in five trading days

Sell pressure ahead of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting has triggered high volatility of equities trading at the Nigerian Exchange Limited (NGX).

The all-share index (ASI) and market capitalisation depreciated by 2.93 per cent or N521 billion to close the week at 38,324.07 and N19.975 trillion.

Similarly, other indices finished lower except NSE Oil and Gas, NSE Growth and NSE Sovereign Bond indices which appreciated by 7.39 per cent, 0.62 per cent and 3.02 per cent respectively.

Analysts predicted a gloomy outlook this week, as investors adopt a ‘wait and see’ approach ahead of any catalyst that will trigger growth.

Analysts at Afrinvest Securities said:” In the coming week, we expect the bearish sentiment to continue in the absence of any positive catalyst.

Codros Capital said:” In the week ahead, we believe investors will be focused on the outcome of the highly-anticipated MPC meeting to gain further clarity on the movement of yields in the FI market.

“Consequently, we see more of a ‘choppy theme’ as cautious trading dominates the market. Notwithstanding, we advise investors to take positions in only fundamentally-justified stocks as the weak macroeconomic outlook remains a significant headwind for corporate earnings.”

Also, Vetiva Dealings and Brokerage said: “We expect the market to follow a similar pattern next week, with investors adopting a wait-and-see approach in the market ahead of any major catalyst to move the market in either direction.”

A breakdown of activities last week showed that the domestic equities market reopened on Monday with a 0.44 per cent loss, following depreciation in many high capitalised stocks.

Specifically, the ASI decreased 175.42 basis points, representing a decline of 0.44 per cent to close at 39,306.47 basis points. Similarly, the overall market capitalisation value lost N92 billion to close at N20.487 trillion. Sector performance was broadly negative with the banking, consumer goods and industrial sectors closing in the red.

The downtrend was driven by price depreciation in medium and large capitalised stocks amongst which are; Nigerian Enamelware, MTN Nigeria Communications (MTNN), Stanbic IBTC Holdings, BUA Cement and Lafarge Africa.

Trading activities on the stock market closed on a downward note, to extend the bearish sentiments to two consecutive trading days, as the ASI dipped by 0.72 per cent.

The ASI dropped by 283.95 points, representing a decline of 0.72 per cent to close at 39,022.52 points. Also, market capitalisation depreciated by N148 billion to close at N20.339 trillion

The downturn was driven by price depreciation in large and medium capitalised stocks amongst which are; BUA Cement, Portland Paints & Products Nigeria, SCOA Nigeria, FBN Holdings and Zenith Bank.

Market sentiment, as measured by market breadth, closed negative as 16 stocks appreciated while 22 others constituted the losers’ chart.

Further analysis of last week’s activities showed that a total turnover of 1.048 billion shares worth N11.543 billion was recorded in 17,233 deals by investors on the floor of the exchange, in contrast to a total of 840.334 million shares valued at N9.561 billion that changed hands in 13,239 deals during the preceding week.

The financial services industry led the activity chart with 674.741 million shares valued at N5.589 billion traded in 9,405 deals; thus contributing 64.41 per cent to total equity turnover.

The conglomerate industry followed with 94.524 million shares worth N630.366 million in 828 deals. The third place was ICT Industry, with a turnover of 87.137 million shares worth N630.903 million in 539 deals.

Trading in the top three equities namely Zenith Bank Plc, FBN Holdings Plc and Fidelity Bank Plc accounted for 248.273 million shares worth N3.288 billion in 2,988 deals, contributing 23.70 per cent to the total equity turnover.

A total of 5,646 units of Exchange Traded Products (ETPs) valued at N623,224 were traded ĺast week in 14 deals compared with a total of 14,477 units valued at N258,795.90 transacted in four deals during the precedent week.

Also, 80,998 units of bonds valued at N81.944 million were traded last week in 22 deals compared to a total of 151,345 units valued at N157.944 million transacted in 75 deals during the preceding week.

   

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Time Nigeria is a general interest Magazine with its headquarters in Abuja, the nation’s Capital.
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The Missing Middle of Infrastructure Finance: Why Capital Still Fails to Become Infrastructure

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This is not a story about a reluctant investor. It is a story about capital that wants to move, cannot find enough places willing and able to receive it in a form it can underwrite, and quietly waits instead. Multiply that fund by the hundreds of pension schemes, sovereign wealth vehicles, commercial banks and infrastructure funds now carrying dedicated allocations for emerging-market infrastructure, and a pattern emerges that rarely makes it into a headline: the world is not short of capital for infrastructure. It has capital in historic abundance, sitting adjacent to a historic infrastructure gap, unable to cross the distance between the two. The Comfortable Explanation  The explanation on offer at every major infrastructure summit is a familiar one. Global infrastructure investment needs run into the tens of trillions of dollars over the coming decade; committed capital falls well short; therefore, the problem is one of insufficient funding, and the solution is more of it: more pledges, more blended-finance facilities, more climate funds, more multilateral capital increases. It is a comfortable explanation because it assigns responsibility clearly to governments who under-fund, institutions who under-commit, and it offers a clean remedy: raise more. 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The first condition is met, overwhelmingly, across nearly every category of capital that matters to infrastructure. The second is met by only a small fraction of the projects competing for it. The result is a market that looks, from the outside, like a financing gap, and functions, from the inside, like a conversion problem: an abundance of capital on one side, an abundance of infrastructure need on the other, and an underbuilt set of mechanisms in between capable of turning one into the other at any meaningful scale. Where the Conversion Breaks  The break does not happen at the ends of the process. It happens in the middle, in the unglamorous sequence of work that turns a plausible concept into an instrument a fiduciary can sign. A promising transmission project needs a feasibility study rigorous enough to survive institutional scrutiny rather than optimistic enough to attract early interest. It needs offtake arrangements that hold up under real counterparty and currency risk, not the counterparty risk assumed in a base case. It needs environmental and social documentation calibrated to the standards of the institutions being asked to fund it, not the standards of the jurisdiction hosting it. It needs a legal and commercial structure that allocates risk in ways a commercial lender, not only a development financier, will accept. It needs a sponsor capable of executing what has been proposed, not merely capable of proposing it. Each of these is ordinary project finance discipline. None of it is exotic, and in mature infrastructure markets it happens as a matter of course, absorbed into systems built over decades: specialist advisers, standard-form contracts, established procurement norms, deep pools of transaction expertise. What is missing in the markets where the infrastructure gap is largest is not the standard itself but the machinery that meets it. Projects arrive at investment committees with ambition intact and preparation incomplete, and that gap is treated, again and again, as an individual project’s failure rather than what it actually is: a structural absence in the systems responsible for producing investable transactions at scale. The Missing Middle  This is the Missing Middle of Infrastructure Finance: the institutional architecture that sits between capital that wants to move and infrastructure that needs building, and whose incompleteness explains far more of the global infrastructure gap than any shortfall in committed funds. It consists of project preparation facilities able to fund feasibility and structuring work before commercial viability has been proven. Transaction advisers capable of building deals that satisfy development mandates and commercial return thresholds at once, rather than treating the two as separate constituencies to be managed sequentially. Risk-sharing and guarantee instruments that convert political, regulatory and currency risk into something a commercial balance sheet can underwrite. Aggregation platforms that bundle smaller, individually sub-scale projects into portfolios large enough to justify institutional transaction costs. Standardised documentation that reduces the bespoke legal cost of every new deal. And coordination across ministries, regulators and financiers robust enough that a technically sound project does not die in bureaucratic sequencing after the money has already been found. None of these are new ideas in isolation. What is missing is their assembly into a coherent system, deliberately funded and institutionally accountable, rather than scattered across donor-funded pilots that end when the grant does. The African Dimension  Africa makes this dynamic unusually visible, and consequently offers an unusually clear opportunity to correct it. The continent’s infrastructure financing need, by any measure, is vast. Less understood is that the shortfall is disproportionately one of preparation rather than capital. Nigerian gas-to-power, off-grid solar and mini-grid developers have each demonstrated that individual projects can clear the bankability bar; what has not emerged is systemic pipeline scale, a steady stream of comparably prepared projects large enough to absorb the capital already circling the sector. The pattern repeats, with local variation, from grid infrastructure in East Africa to transport corridors in West Africa. Interested capital is rarely the scarce input. Investment-ready projects are. The Global Comparison  Mature markets solved this problem gradually and mostly invisibly, through decades of institution-building that predates the current infrastructure conversation: specialist project finance units inside banks, standardised PPP frameworks, established regulatory playbooks, deep benches of transaction lawyers and engineers who move between deals rather than between one-off assignments. Emerging and frontier markets are not being asked to meet a lower standard. They are being asked to meet the same standard without having built the same machinery, and then being told, when deals fail to close, that the problem is insufficient funding….
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