NGX Delivers 24% Return in 2-Month Despite Price Correction
Year-to-date return moderated to 24% as the Nigerian Exchange (NGX) market capitalisation dropped by N1.4 trillion amid profit-taking in some stocks that recently rallied in the local bourse.
The Lagos bourse closed on a weaker footing, reversing part of the previous week’s gains as declining investor confidence and subdued trading activity dampened upward momentum.
The All-Share Index (ASI) shed 1.11% week-on-week to close at 192,826.77 points. The total market capitalisation fell to ₦123.76 trillion from ₦125.76 trillion in the preceding week, a drop of ₦1.40 trillion.
With the downbeat sentiment, the year-to-date return moderated to 24%. Market breadth was negative at 0.46x, with 32 gainers against 69 decliners, reflecting broad-based selling pressure across counters.
Trading activity also weakened considerably, as volume and turnover declined by 28.42% and 22.01% week-on-week, respectively. However, the number of deals rose by 7.25% over the same period.
Stockbrokers at Cowry Asset reported that investors had traded 5.48 billion shares worth ₦196.44 billion across 370,020 deals, highlighting lower overall participation.
Sectoral performance during the week was broadly positive, with selective profit-taking and bargain hunting shaping market direction.
The Industrial Goods index lagged, declining by 0.69% week-on-week (W-o-W) due to notable sell-offs in Beta Glass Plc (BETAGLAS) and Lafarge Africa Plc (WAPCO).
The pullback suggests mild profit-taking in heavyweights within the segment, according to stockbrokers.
Conversely, the Oil & Gas sector emerged as the top gainer, advancing 8.66% W-o-W. The rally was largely driven by price stability and selective accumulation in Japaul Gold & Ventures Plc (JAPAULGOLD), Aradel Holdings Plc (ARADEL), and Seplat Energy Plc (SEPLAT), reflecting improved investor appetite for energy plays.
The Consumer Goods sector followed with a strong 7.04% gain, supported by bargain-hunting in NASCON Allied Industries Plc (NASCON), Nestle Nigeria Plc (NESTLE), and McNichols Plc (MCNICHOLS).
Similarly, the Banking index appreciated by 5.68% on renewed buying interest in FBN Holdings Plc (FIRSTHOLDCO) and Stanbic IBTC Holdings Plc (STANBIC).
The Insurance sector also posted a respectable 4.73% gain, buoyed by sustained demand for FGT Insurance Company Limited (FGTINSURE), Custodian Investment Plc (CUSTODIAN), Mutual Benefits Assurance Plc (MBENEFIT), and Lasaco Assurance Plc (LASACO), indicating sustained risk appetite in the segment.
Leading the advancers was FTGINSURE, which surged 56.7% week-on-week, followed by OKOMUOIL (+20.9%), INFINITY (+20.6%), MANSARD (+17.2%), and FCMB (+16.8%), reflecting renewed buying interest across insurance, agriculture, and banking names.
Conversely, profit-taking weighed on ABCTRANS (-25.0%), DAARCOMM (-20.7%), TANTALIZER (-16.7%), LIVINGTRUST (-14.5%), and UPL (-13.0%), indicating rotational flows and selective exit from previously rallied counters.
“We expect the market to remain cautiously weak in the near term as bearish sentiment and profit-taking activities continue to weigh on performance.
“With market breadth still negative and trading volumes subdued, investors are likely to adopt a selective approach, focusing on fundamentally sound and defensive stocks. Thus, we continue to advise investors to take positions in fundamentally sound counters”, Cowry Asset said in its market report.
