The stock fell 9.9 percent to 20 naira by the close in Lagos, Nigeria’s commercial capital, its biggest daily decline since May 13, 2004. More than 1.7 million securities changed hands, 1.8 times the three-month daily average, according to data compiled by Bloomberg.
Ashaka had rallied 24 percent this year before today’s retreat, pushing its 14-day relative strength index to 79.3 yesterday. A reading above 70 suggests a security is overvalued and will probably fall. The stock gain compares with 11 percent for Lafarge Cement Wapco Plc in the same period, and a 9.3 percent advance for Dangote Cement Plc (DANGCEM), Nigeria’s biggest company by market value.
“The stock is falling on technicalities as short-term retail investors believe it has been over bought,” Pabina Yinkere, head of research at Lagos-based Vetiva Capital Management Ltd., said by phone today.
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