Amaechi Raphael Chinedu
@Official_ARC·8h
One stock took about ₦2.5trn off the NGX today. Here's why the index felt it
The All-Share Index fell 1.98% on Thursday to 249,710.59, and the market lost about ₦3.28trn in value. But most of that came from a single company. 
$DANGCEM fell the 10% daily limit, from ₦1,490 to ₦1,341. That one move is a good way to learn how the index is actually built.
The ASI is weighted by market capitalisation. Market cap is the share price multiplied by the number of shares in issue. So a big company counts for more than a small one, and a 10% fall in a giant moves the index far more than a 10% fall in a small stock.
Here's the maths, using today's official close:
• Dangote Cement has roughly 16.8bn shares in issue
• A ₦149 drop on each share is about ₦2.5trn of value
• That's about three-quarters of the whole market's ₦3.28trn loss
• Before today, the company was worth about ₦25trn, roughly 15% of the ₦165.42trn market
• A 10% fall in a stock that's 15% of the index is about a 1.5% fall in the index on its own
$PRESCO also fell 10%, to ₦1,656.80, adding roughly another ₦0.2trn. Between them, two stocks explain most of the day's drop. Meanwhile CWG, Abbey Bank and Honeywell Flour all rose more than 9%, and the NGX Growth Index actually gained 0.21%.
Three things this teaches:
1. A red index doesn't always mean a broad sell-off. Check how many stocks actually fell, and which ones.
2. Concentration cuts both ways. The Guardian reported this week that ten companies make up about 73% of the market's value, so a handful of names can lift or drag the ASI on any day.
3. Your portfolio isn't the index. If you don't hold the heavyweights, your day may look very different from the headline number.
Want to see how today's move actually hit the stocks you own? Add your portfolio on Gopexly and follow along.
Not financial advice, just how the numbers work.
$DANGCEM fell the 10% daily limit, from ₦1,490 to ₦1,341. That one move is a good way to learn how the index is actually built.
The ASI is weighted by market capitalisation. Market cap is the share price multiplied by the number of shares in issue. So a big company counts for more than a small one, and a 10% fall in a giant moves the index far more than a 10% fall in a small stock.
Here's the maths, using today's official close:
• Dangote Cement has roughly 16.8bn shares in issue
• A ₦149 drop on each share is about ₦2.5trn of value
• That's about three-quarters of the whole market's ₦3.28trn loss
• Before today, the company was worth about ₦25trn, roughly 15% of the ₦165.42trn market
• A 10% fall in a stock that's 15% of the index is about a 1.5% fall in the index on its own
$PRESCO also fell 10%, to ₦1,656.80, adding roughly another ₦0.2trn. Between them, two stocks explain most of the day's drop. Meanwhile CWG, Abbey Bank and Honeywell Flour all rose more than 9%, and the NGX Growth Index actually gained 0.21%.
Three things this teaches:
1. A red index doesn't always mean a broad sell-off. Check how many stocks actually fell, and which ones.
2. Concentration cuts both ways. The Guardian reported this week that ten companies make up about 73% of the market's value, so a handful of names can lift or drag the ASI on any day.
3. Your portfolio isn't the index. If you don't hold the heavyweights, your day may look very different from the headline number.
Want to see how today's move actually hit the stocks you own? Add your portfolio on Gopexly and follow along.
Not financial advice, just how the numbers work.0 views
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