Nigeria: Covid-19, Global Weakness to Continue to Pressure Equities

30 March 2020

The equities market would continue to be pressured by the impact of the fast spreading Coronavirus, COVID-19, pandemic in the country as well as the weak sentiment across the global markets, investment analysts have said.

Meanwhile, as part of the COVID-19 containment measures, the Corporate Affairs Commission, CAC, has approved the conduct of Annual General Meetings, AGMs, by proxy to stave off the spread through human contacts.

The Commission said companies should take advantage of section 230 of the Companies and Allied Matters Act, CAMA, to conduct the meeting, but added that companies must first secure its permission to be able to do so.

The Commission said in the "Guidelines on Holding of Annual General Meetings of Public Companies Using Proxies", that the meeting would discuss only the ordinary business as provided in S.214 CAMA, while it, CAC, would send representatives as observers to the meeting.

"Notice of meeting and proxy form shall be sent to every member in accordance with the requirements of CAMA. Companies will be required to provide the CAC with the evidence of postage or delivery of such notices after the meeting.

"All the members shall be advised in the notice that in view of the COVID-19 pandemic, attendance shall only be by proxy with names and particulars of the proposed proxies listed for them to select therefrom. The invitation shall be issued at the companies' expense as well as the stamp duties, which shall be prepaid by the company. The proxies need not be members of the company.

"The company shall be guided by the provisions of its Articles or CAMA as regards to a quorum. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one," the Commission said.

Following the sustained COVID-19 phobia, the equities market continued on a downward trend despite pockets of gains recorded in three of the trading days last week. Investors lost a total N175 billion last week.

Consequently, the market capitalisation of all listed equities declined by 1.51 percent to N11.393 trillion from N11.568 trillion, while the All-Share Index plummeted by 1.52 percent to close 21,861.78 points.

Analysing by sectors, significant losses recorded in the consumer goods (-8.1%) and oil and gas (-2.2%) sectors, weighed on the market performance. The industrial goods sector followed suit, declining by 0.5 percent. The insurance (+3.3%) and banking (+2.1%) sectors emerged the sole gainers.

Reacting, analysts at Cordros Capital said: "The trend witnessed this week is likely to persist, as weakening market sentiment in the face of the fast-spreading coronavirus pandemic and the weakness across global markets are expected to pressure market returns. Nonetheless, we advise investors to take positions in fundamentally justified stock."

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