Equity investors lose N4.9trn, as market uptrend reverses
Nigerian Stock Market Sees N4.9 Trillion Loss as Uptrend Reverses
By Peter Egwuatu
The Nigerian stock market experienced a significant downturn last week, with investors losing over N4.915 trillion as the market trend reversed. This decline occurred on the Nigerian Exchange Limited (NGX) amid widespread profit-taking across key sectors.
As a result, the market capitalization of the NGX fell to N155.593 trillion on Friday, down from N160.508 trillion the previous week. Analysts attribute the decline to a combination of portfolio rebalancing, valuation concerns following a remarkable rally, and caution among investors looking to preserve recent gains.
The NGX All Share Index (ASI), which tracks stock price movements, dropped 3.1%, closing at 242,593.31 points on Friday, down from 250,385.47 points the prior week. This decline reflects a generally negative trading sentiment, with sellers dominating in sectors such as banking, oil and gas, industrial goods, consumer goods, and insurance.
Last week’s trading figures reveal significant losses among major companies, with FirstHoldco losing 11.4%, BUA Cement dropping 10.0%, ARADEL declining by 9.5%, MTNN falling 5.5%, and WAPCO decreasing 3.5%. Month-to-date (MtD) and year-to-date (YtD) returns now stand at 0.5% and 56.4%, respectively. Despite the overall downturn, market participation improved, with trading volume and value increasing by 71.7% and 67.9% week-over-week.
Sector performance was largely negative, with the Oil & Gas Index down 5.2%, the Industrial Goods Index declining 4.4%, the Banking Index falling 3.4%, the Insurance Index decreasing 1.9%, and the Consumer Goods Index dropping 0.7%.
Looking ahead, analysts at InvestData Consulting Limited expressed a mixed outlook for the market. They noted that while the potential for short-term volatility remains, the longer-term perspective is positive, supported by strong corporate fundamentals and improving economic conditions. They recommend investors focus on companies with resilient earnings, attractive valuations, and strong dividend potential.
In a similar sentiment, analysts at Cordros Capital suggested that market activity is likely to remain cautious and range-bound in the near term, given the absence of a clear catalyst to stimulate buying interest.
Investors are advised to adopt a selective approach, concentrating on fundamentally strong companies while taking advantage of opportunities created by the current market weakness.
