NGX Market Cap Falls by N532bn as Investors Exit Positions
The Nigerian Exchange, NGX, shrank as equities investors trading highs and lows in the local bourse lost more than N532 billion in the week. Stockbrokers reported that the equities market continued its downward trend this week, with increasing volatility exerting pressure on stock prices.
As a result, the NGX benchmark index declined for yet another consecutive week, falling by 0.94% on a week-on-week basis to settle at 104,962.96 points. The persistent downturn, according to Cowry Asset Limited, was primarily driven by investors reacting to evolving global economic conditions, despite the release of the Consumer Price Index (CPI) report for February 2025.
Since inflation eased, the market has been heated up with stocks selling festival stoked by Nigeria’s positive real return on investment environment. The positive macroeconomic developments failed to offset the prevailing bearish sentiment, leading to an extended sell-off across various sectors of the market, Cowry Asset Management Limited told investors in a note.
With bears continuing to dominate market activity, the year-to-date return on the All-Share Index weakened further, moderating to 1.98%. The prevailing negative market breadth and weak internal fundamentals contributed to the overall decline in investor confidence, reinforcing a cautious approach among market participants.
Trading activity throughout the week remained subdued, as evidenced by the negative market breadth of 0.68 times. A total of 32 stocks recorded gains during the week, while 47 stocks declined in value, highlighting the sustained sell pressure across the board.
The total number of deals executed on the Nigerian Exchange also fell, declining by 6.15% week-on-week to 57,043 transactions.
Furthermore, the volume and value of traded stocks experienced declines, with total weekly volume reducing by 11.55% to 2.90 billion units, while the total market value of traded securities dropped by 24.33% to N48.06 billion. From a sectoral perspective, market performance was largely bearish, with five out of the six major sectoral indices closing in negative territory.
The NGX Consumer Goods Index was the only sector to record a marginal gain, rising by 0.06% week-on-week.
Stockbrokers said the slight appreciation was driven by upward price movements in stocks such as Neimeth, NNFM, NASCON, and Dangote Sugar, which benefited from renewed investor interest.
Conversely, the NGX Industrial Index suffered the most significant losses, declining by 3.39% week-on-week. The downward movement was primarily attributed to price depreciation in stocks such as BUA Cement, UPDCREIT, and Cutix Plc, which witnessed heavy sell pressure.
Similarly, the NGX Insurance Index and the NGX Banking Index recorded substantial declines of 2.87% and 2.55%, respectively. This was because a slew of equities investors offloaded their positions in stocks such as Universal Insurance, Sovereign Trust Insurance, FCMB Group, First Bank Holdings, and AccessCorp.
The losses in these financial sector stocks were largely driven by portfolio rebalancing activities, as investors reassessed the impact of falling CPI figures and the continued positive performance of both the money market and fixed income securities.
In addition, the NGX Oil & Gas Index and the NGX Commodity Index also experienced losses, falling by 1.08% and 0.45%, respectively.
The decline in the oil and gas sector was largely influenced by sell-offs in key oil-producing companies, as investors remained cautious amid ongoing political and economic developments in Nigeria’s oil-rich regions.
Despite the overall bearish sentiment, a handful of stocks managed to outperform the market, generating positive returns for investors.
Notably, Neimeth International Pharmaceuticals emerged as the best-performing stock of the week, appreciating by 20.5%, followed closely by Linkage Assurance, which gained 13.5%.
Other stocks that recorded significant gains included NNFM with a 10% increase, Academy Press with a 9.9% rise, and Mutual Benefits Assurance (MBENEFIT), which gained 9.8%.
On the other hand, several stocks suffered considerable declines as investors exited their positions in a bid to cut losses. ETranzact International recorded the steepest loss, depreciating by 26.2%, followed by Livestock Feeds, which declined by 17.5%.
Other notable laggards included Red Star Express, which fell by 16.9%, Universal Insurance, which lost 13.3%, and Caverton Offshore Support Group, which dropped by 13%.
Overall, the total market capitalisation of listed equities declined by 0.80%, or N532.17 billion, week-on-week to close at N65.82 trillion. In its update, Cowry Asset Limited said the prevailing market conditions indicate that the market is currently in an oversold state, presenting a potential buying opportunity for discerning investors.
“The ongoing pullback has created an environment where dividend-paying stocks are becoming increasingly attractive, as their yields are likely to improve in response to the recent price corrections.
“As the market enters the final trading week of March and concludes the first quarter of 2025, many investors may begin repositioning their portfolios to take advantage of dividend season, which typically offers prospects for capital appreciation and income generation.
“Looking ahead, the equities market is expected to experience continued corrections and portfolio adjustments, as investors digest corporate earnings reports and assess the broader impact of macroeconomic data releases”.
“The direction of the market in the near term will likely be influenced by the performance of global financial markets, monetary policy decisions by the Central Bank of Nigeria (CBN), and investor sentiment surrounding Nigeria’s economic outlook”, Cowry Asset Limited told investors in its report.#NGX Market Cap Falls by N532bn as Investors Exit Positions Naira Exchange Rates Switch Positions in FX Markets
