Stock Market opens negative amidst jumping unemployment rate

THE Nigerian Stock Exchange (NSE) opens negative on Monday after bearish close last week amidst jumping unemployment rate in the country.

Investors sentiment got off to a negative start, following the sell-offs witnessed on some heavyweight tier-1 banking stocks, especially GUARANTY (-260bps) and ZENITHBANK (-7bps).

Precisely, the benchmark index dipped by 22 basis points (bps) to 38,561.84pts, making this the third consecutive loss.

Consequently, the year to date loss swelled up to 4.24%, while the stock market capitalisation declined to N20.176 trillion.

The blend of Wapic Insurance Plc (+10.00% to N0.55), Northern Nigeria Flour Mills Plc (+9.73% to N6.20), and NEM Insurance Plc (+7.88% to N2.19) were today’s top gaining stocks.

On the flip side, Regency Alliance Insurance Co Plc (-9.09% to N0.30), Livestock Feeds Plc (-8.50% to N1.83), and Nigerian Breweries Plc (-5.34% to N47.00) were today’s top losers stock.

In a market report, Chapel Hill Denham said performance across its coverage universe was mixed but with a bearish bias.

“Precisely, 3 of 5 of our coverage indices closed in the red terrain”, the investment firm added.

The NSE banking, NSE consumer goods, and NSE industrial goods indices closed negative, moderating by 101bps, 152bps, and 1bp, respectively.

The preceding offset the gains recorded in the NSE oil & gas and NSE insurances indices, both of which rose by 66bps and 198bps, respectively.

Market analysts stated that the market’s activity was weak, with the total volume declining by 37.23% to 185 million, while the total value traded dipped by 33.22% to N2.518 billion.

Today’s most traded stocks by volume were FBNH (31.14mn units), NOTORE (22.00mn units), and FIDELITYBK (15.28mn units).

On the other hand, the top traded stocks by value were NOTORE (N1.375bn), FBNH (0.226bn), and ZENITHBANK (0.163bn).

Elsewhere, the Chapel Hill Denham’s Paramount Equity Fund (PEF) and the Women Investment Fund (WIF) declined by 59bps and 37bps, respectively.

Nigeria’s Unemployment Rate Jumps

Nigeria’s unemployment rate has jumped to 33.3% in the fourth quarter of 2020, National Bureau of Statistics noted in its Labour force report.

It was noted that unemployment rate surged by 6.2 percentage points to 33.3% in in Q4-2020 from 27.1% in Q2-2020.

Meanwhile, the Bureau of Statistics indicated that underemployment rate declined to 22.8% from 28.6% within the same period.

Data showed that number of persons in the economically active or working age population (15 – 64 years of age) during the reference period of the survey, Q4, 2020 was 122,049,400.

“This is 4.3% higher than the figure recorded in Q2, 2020, which was 116,871,186”, the Bureau stated.

The number of persons in the labour force – that is, people within ages 15 -64, who are able and willing to work – was estimated to be 69,675,468.

However, NBS stated that this was 13.22% less than the number persons in Q2, 2020.

Of this number, those within the age bracket of 25-34 were highest, with 20,091,695 or 28.8% of the labour force.

The total number of people in employment during the reference period was 46,488,079.

Of this number, 30,572,440 were full-time employed, that is those that worked 40+ hours per week, while 15,915,639 were under-employed – working between 20-29 hours per week.

The Bureau indicates that this figure is 20.6% less than the people in employment in Q2, 2020.

“The unemployment rate during the reference period, Q4, 2020 was 33.3%, an increase from the 27.1% recorded in Q2, 2020.

“The underemployment rate declined from 28.6% in Q2, 2020 to 22.8%.

“The unemployment rate among rural dwellers was 34.5%, up from 28.2% in Q2, 2020, while urban dwellers reported a rate of 31.3% up from 26.4%”, NBS explained.

In the case of underemployment among rural dwellers, NBS said it declined to 26.9% from 31.5%, while the rate among urban dwellers decreased to 16.2% from 23.2% in Q2, 2020.

For the period under review, Q4, 2020, the unemployment rate among young people (15- 34years) was 42.5% up from 34.9%.

Meanwhile the rate of underemployment for the same age group declined to 21.0% from 28.2% in Q2, 2020.

“These rates were the highest when compared to other age groupings”.

Under State disaggregation, Imo State reported the highest rate of unemployment with 56.6%, this was followed Adamawa and Cross River States with 54.9% and 53.7% respectively.

The State with the lowest rate was Osun in the South-West with 11.7%.

For underemployment, the state which recorded the highest rate was Benue with 43.5%, while Lagos State recorded the lowest underemployment rate, with 4.5% in Q4, 2020.

NBS said a total number of 12,160,178 did not do any work in the last 7 days preceding the survey.

Distribution of Working Age Population

The results of the survey indicate that the estimated number of persons in the economically active or working age population (15 – 64 years of age) during the reference period of the survey, Q4, 2020 was 122,049,400.

This is 4.3% higher than the figure recorded in Q2, 2020, which was 116,871,186. Of this number, females represent 50.49%, while males account for 49.5%.

Further disaggregation by age group shows that the 30.2% of the total active population is within the ages of 15-24, the highest among the age groupings.

The age-group with the smallest active population is 55-64, with 10,221,108 or 8.37% of the total active population.

Stock Market Opens Negative amidst Jumping Unemployment Rate