Market Index Retreats as Investors React to Interest Rate Decision
The Nigerian Exchange (NGX) All-Share Index, or market index, retreated as equities investors exited positions in reaction to the decision of the central bank to keep the interest rate unchanged.
After riding a bullish wave for four consecutive weeks, the Nigerian equity market reversed course, closing the week in the red as investors reassessed their positions, stockbrokers said.
NGX All-Share Index declined by 0.62% week-on-week, settling at 109,028.62 points, as sell-offs across the banking and energy sectors weighed heavily on the overall market performance.
The local bourse nosedived on the back of portfolio rebalancing activities by investors in reaction to the Central Bank’s decision to keep all policy parameters unchanged at its 300th Monetary Policy Committee meeting, Cowry Asset Limited said.
Meanwhile, equities market capitalisation declined but at a lower rate, dipping by 0.29% to close at N68.75 trillion as a result of UBA’s rights issue listing in the local bourse during the week.
Specifically, the bourse saw the admission of 34.2 billion new ordinary shares from UBA’s Rights Issue, which effectively expanded the market float and contributed to a notional loss of approximately N201.4 billion in investor wealth.
Consequently, the year-to-date return on the index moderated to 5.93%, despite a relatively positive market breadth, with 52 gainers outpacing 41 losers over the course of the week.
Weekly transaction volume surged by 50.8% to 3.92 billion units, executed across 105,012 deals, marking a 35.7% increase in deal count compared to the previous week.
The total value of trades also rose significantly by 17.2%, reaching N74.61 billion—underscoring the resilient investor appetite for Nigerian equities even amid short-term volatility.
Sectoral performance was mixed, with a split between gainers and laggards among the six major indices tracked by Cowry Asset Management Limited.
The Consumer Goods Index led the gainers side, advanced by 2.18% on the back of renewed buying interest in bellwether names such as Nestlé Nigeria, Tantalizers, Guinness Nigeria, and Ikeja Hotel.
Similarly, the Insurance and Industrial Goods indices posted marginal gains of 0.73% and 0.72%, respectively, buoyed by improved sentiment in counters like CUTIX, Custodian Investment, Regal Insurance, Tripple Gee, Beta Glass, and Linkage Assurance.
On the downside, the Oil & Gas Index suffered the heaviest loss of the week, declining by 3.44%. This was followed by the Banking Index, which dropped 1.52%, and the Commodity Index, which lost 0.75%.
The sectoral drag was primarily due to price declines in key stocks such as Fidelity Bank, Aradel Holdings, AccessCorp, Oando, Wema Bank, and Zenith Bank.
Top gainer include Regal Insurance which stood out with a notable 18.2% gain, followed closely by Linkage Assurance (17.6%), Tantalizers (17.4%), E-Tranzact (15.3%), and Tripple Gee (15.0%).
Conversely, the worst performers included Chellarams (-10.0%), Caverton Offshore (- 9.5%), Legend Intercontinental (-9.5%), Learn Africa (-8.9%), and The Initiates Plc (TIP), which declined by 8.8%.
Cowry Asset Limited expects market sentiment to remain cautiously optimistic, noting that the anticipated release of Nigeria’s Q1 2025 GDP report is likely to influence investor positioning, especially if it confirms expectations of positive economic output growth.
Stock market analysts highlighted that the ongoing corporate earnings season may provide fresh catalysts for stock-specific rallies. #Market Index Retreats as Investors React to Interest Rate Decision Nigeria’s Top 5 Banks Market Value Falls Below N8 Trillion
