The Nigerian stock market reversed its upward trajectory last week with investors losing over N4.915 trillion of their investment listed on the Nigerian Exchange Limited, NGX.
The development was driven by a sustained profit-taking move across major sectors.
Consequently, the NGX market capitalisation, which represents the total value of stocks listed on the Exchange, declined to N155.593 trillion on Friday from N160.508 trillion the previous week.
Analysts noted that the bearish close, Week on Week, WoW, reflects a combination of portfolio rebalancing, valuation concerns following the market’s remarkable rally, and cautious positioning by investors seeking to preserve gains accumulated over the past several months.
Another major performance indicator, NGX All Share, ASI, which reflects the stock prices movement, also shed 3.1%, closing on Friday at 242,593. 31 points from 250,385.47 points the previous week, an indication that trading sentiment remained largely negative throughout the week under review , with sellers dominating activities across the banking, oil and gas, industrial, consumer goods and insurance sectors.
Analysis of trading last week shows that losses in FirstHoldco by -11.4% BUA Cement -10.0%, ARADEL -9.5%, MTNN -5.5% and WAPCO 3.5%) contributed significantly to drag the ASI lower. As a result, Month-to-Date, MtD and Year-to-Date, YtD returns settled at 0.5% and 56.4%, respectively. Market participation improved as trading volume and value increased by 71.7% WoW and 67.9% WoW respectively. Sectoral performance was broadly negative, as the Oil & Gas Index declined by -5.2%, Industrial Goods Index -4.4%, Banking Index -3.4%, Insurance Index -1.9% and Consumer Goods Index -0.7%.
Commenting on market outlook, analysts at InvestData Consulting Limited stated: “Looking ahead, the market is likely to experience mixed sentiment as bargain hunting competes with continued profit-taking. While short-term volatility may persist, the medium-to-long-term outlook remains positive, supported by strong corporate fundamentals, improving economic conditions and growing investor confidence in the domestic market. Stocks with resilient earnings profiles, attractive valuations and strong dividend potential are expected to attract renewed demand once the current corrective phase begins to stabilise.
Investors are therefore advised to remain selective, focusing on fundamentally strong companies while taking advantage of opportunities created by market weakness.”
Commenting as well, analysts at Cordros Capital stated: “Looking ahead, we expect market activity to remain cautious and largely range-bound in the near term, given the lack of a meaningful catalyst to spur buying interest.”
