The Nigerian equities market experienced a sharp reversal last week, with investors recording massive losses estimated at N4.915 trillion as sustained profit-taking triggered a broad sell-off across major sectors.
According to data from the Nigerian Exchange Limited (NGX), the total market capitalisation dropped significantly from N160.508 trillion to N155.593 trillion by Friday’s close.
The benchmark NGX All-Share Index (ASI) also shed 3.1%, declining from 250,385.47 points to close at 242,593.31 points. This performance reflected largely negative trading sentiment throughout the week, with sellers dominating activities in banking, oil and gas, industrial goods, consumer goods, and insurance stocks.
Heavyweight Stocks Drag Index Lower
Significant declines in major stocks contributed heavily to the downturn. FirstHoldco dropped 11.4%, BUA Cement fell 10.0%, ARADEL declined 9.5%, MTNN shed 5.5%, and WAPCO lost 3.5%.
As a result, the market’s Month-to-Date return moderated to 0.5%, while the Year-to-Date return stood at a still-impressive 56.4%.
Despite the price decline, market participation improved, with trading volume rising by 71.7% and turnover increasing by 67.9% week-on-week.
All major sectoral indices closed in the red: Oil & Gas (-5.2%), Industrial Goods (-4.4%), Banking (-3.4%), Insurance (-1.9%), and Consumer Goods (-0.7%).
Analysts’ Outlook
Analysts at InvestData Consulting Limited noted that while short-term volatility may persist, the medium to long-term outlook remains positive.
“Looking ahead, the market is likely to experience mixed sentiment as bargain hunting competes with continued profit-taking,” they said. “Stocks with resilient earnings profiles, attractive valuations and strong dividend potential are expected to attract renewed demand once the current corrective phase stabilises.”
They advised investors to remain selective and focus on fundamentally strong companies while taking advantage of opportunities created by the current market weakness.
Similarly, analysts at Cordros Capital expect cautious and largely range-bound market activity in the near term due to the absence of strong positive catalysts.
The latest correction follows a remarkable rally that saw the market hit record highs earlier in the year. Investors will be closely watching for signals of stabilisation or further profit-taking in the coming sessions.
