The selling pressure recorded on the shares of Nestle Nigeria Plc during Thursday’s trading session on the NGX has resulted in shareholders losing around N94.326 billion.
Naijaonpoint’s checks showed consumer goods shares fell 10% to N1,071 a share from N1,190.00 with which it opened the trading session yesterday.
Further analysis showed that Nestlé closed the trading day with N848.934 billion in market capitalization, up from N943.260 billion at the start of trading.
Negative feeling: The drop in Nestle’s share price was due to negative investor sentiment that triggered sell-offs, sinking the share value. This comes amid a buildup to the 2023 general election and a recent interest rate hike by the Central Bank of Nigeria.
Market operators before told Naijaonpoint that the CBN’s decision to raise the interest rate by 16.5% could hurt the equity market, by prompting investors to navigate into the fixed income space.
Capital flight: explained Relentless selling pressure from foreign portfolio investors (FPIs) is due to high commodity inflation triggered by the Russia-Ukraine war, which caused interest rates to rise and, in turn, caused a rise in bond yields in the US and other developed markets.
Foreign institutional investors invest in shares from Nigeria or other emerging markets when they have excess liquidity (low borrowing costs). However, if US bond yields rise, money will move away from emerging markets.
In case you missed it: Despite Nestle’s loss, trading activities on the floor of the Nigerian Stock Exchange (NGX) closed Thursday’s trading day with a gain of N203 trillion in market capitalization as bulls maintained their grip on the bourse. of local values.
The All Share Index (ASI) increased 0.80% to close at 46,604.94 points. In the same vein, the market capitalization appreciated by N203 billion.
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