Amid -3.01% YtD Performance, ASeM Emerge Worst Performing Index on NGX

Kayode Tokede

Currently, at -3.01 per cent Year-till-Date (YtD) performance, the Alternative Securities Market (AseM) board may emerge worst performing index on the Nigerian Exchange Limited (NGX).

This is the third consecutive year the index has performed worst amid companies’ in the index non-compliance to post-listing requirements and macro economic challenges facing Small and Midsize Enterprises (SMEs) in the country.

The AseM index in 2022 dropped by -1.67 per cent and in 2021, it closed at -8.1 per cent.

As the major index, NGX All-Share Index gained 44.43per cent YtD and reached an 74,000 basis points all-time this year, the ASeM remained worst performing index, a reflection of investors’ low patronage caused to poor corporate earnings. 

The AseM index opened this year at 659.42 basis points, dropped by –3.01per cent YtD or 19.87basis points to close at 639.55basis points as of December 22, 2023.

According to THISDAY investigations, the four companies in the Index are struggling to file their result and accounts to the investing public, leading to investors dumping their stocks on NGX.

The four companies:  Capital Oil Plc, Juli Plc, Rak Unity Pet. Comp. Plc, and Smart Products Nigeria Plc contributed N1.32billion out of N40.507 trillion overall market capitalisation as of December 22, 2023.

Specifically, Capital Oil, a petroleum marketing company operating in the downstream sector only submitted unaudited financial statements for the nine months ended 30 Sept 2018 and the management has failed to submit 2018-2022 audited results to the investing public.

The last time Rak Unity Petroleum Company submitted results to the investing public was first quarter (Q1) ended March 31, 2021.

In addition, the last time Smart Products Nigeria, a real estate company submitted results was Q1 ended March 30, 2022 and the company over the years reported N6.08million profit in 2022, representing a decline of 18 per cent from N7.43million in 2021.

Only Juli has submitted up-to-date results for nine months that ended September 30, 2023 on the Exchange.

However, the stock price of these four companies in the AseM board has continued to tumble this year, according to THISDAY investigations.

For instance, the stock price of Capital oil closed trading at N0.20 per share on Friday. The stock price of Capital Oil closed 2022 at N0.22 per share. 

The stock price of Juli closed Friday at N0.59 per share from N0.79 per share it opened for trading this year.

Smurfit closed trading at N0.20 on Friday from N0.22 it closed in 2022 and Rak Unity Petroleum Company stock remained flat at N0.30 per share.

Capital market analysts have stated that poor investors’ interest was driving the moderation of the board, stressing that these companies’ performance is a reflection of macroeconomy challenges facing SMEs. 

The Vice President Highcap Securities Limited, Mr. David Adnori, stated, “I think it is more of the investor interest, not necessarily to do with the companies’ performance on the Exchange.”

He added, “The companies on the board are companies you will classify as small-scale, not highly capitalized companies.

“Many investors do not go there but it doesn’t mean that they will be struggling.  I don’t think those companies have many issues that investors are not going there; it is just that they are not so liquid. They don’t attract the kind of investors that we have in the market today.”