NGX Loses N2trn Despite NIDF, Dangote Additional Shares Listing
The Nigerian Exchange (NGX) equities market capitalisation lost about N2 trillion despite additional shares listed by Dangote Sugar Refinery Plc and Chapel Hill Denham script issues.
The stock market closed its trading session on a negative note last week, driven by renewed sell-off across selected counters amid heightened anticipation of the Dangote Refinery Initial Public Offering (IPO), scheduled for September 14.
The benchmark NGX All-Share Index (ASI) declined by 1.60% week-on-week (WoW) to close at 243,052.74 points, while market capitalisation decreased by approximately N1.96 trillion to N157.59 trillion.
In an investors’ note, stockbrokers at Cowry Securities Limited said the decline in market capitalisation was also influenced by the supplementary listing of 8.09 billion units of Dangote Sugar shares and an additional 355,531 scrip units of Chapel Hill Denham NIDF.
Due to trading patterns, NGX year-to-date (YTD) return moderated to 56.19%. Market breadth remained firmly negative during the week, with only 9 gainers against 80 losers, translating to a breadth ratio of 0.11x.
The weak breadth reflected subdued investor sentiment, as declining stocks significantly outnumbered advancing counters. Trading activity was mixed across the major market indicators.
While the number of deals increased by 9.61%, both trading volume and transaction value declined by 16.36% and 38.15% week-on-week, respectively.
In total, investors exchanged 3.65 billion shares, valued at N130.27 billion, across 245,512 deals.
Sectoral performance was broadly negative during the week, with four of the six sectors under review closing lower. The Insurance and Banking sectors led the decliners, reflecting broad-based sell-offs across major counters.
The Insurance sector fell by 5.52%, weighed down by losses in FTGINSURE, SUNUASSUR, INTENEGINS and GUINEAINS. The Banking sector followed with a 4.07% decline, driven by sell-offs in FIRSTHOLDCO, FCMB, FIDELITYBK and ACCESSCORP.
Similarly, the Industrial Goods sector declined by 3.36%, pressured by profit-taking in AUSTINLAZ, CAP, BUACEMENT and TRIPPLEG. The Consumer Goods sector also shed 2.55%, dragged lower by CHAMPION, MCNICHOLS, CADBURY, NB and NESTLE.
In contrast, the Oil & Gas and Commodity sectors bucked the broader downturn, advancing by 2.83% and 2.19%, respectively. The Oil & Gas sector was supported by gains in SEPLAT, which more than offset losses in JAPAULGOLD, OANDO and ARADEL.
On the gainers’ chart, NGXGROUP emerged as the week’s best-performing stock, appreciating by 13.8%. ELLAHLAKES followed with a 13.3% gain, while SEPLAT, ETRANZACT, and IKEJAHOTEL advanced by 10.0%, 5.7%, and 4.6%, respectively.
On the decliners’ chart, FTGINSURE recorded the steepest decline, shedding 27.5% during the week. CMFC followed with a 24.2% decline, while AUSTINLAZ, OMATEK, and ROYALEX fell by 20.4%, 19.4%, and 18.2%, respectively.
The market’s negative performance was largely driven by weak investor sentiment and increased profit-taking ahead of the anticipated Dangote Refinery IPO, as investors appeared to reposition their portfolios in preparation for the offering.
The resulting sell pressure, particularly across banking and other actively traded counters, weighed on the broader market performance during the week.
“We expect the Nigerian equities market to remain volatile and cautious in the near term as investors reposition ahead of the Dangote Refinery IPO.
“Continued profit-taking and liquidity rotation may exert further pressure on the market, although the sell-off could present selective buying opportunities in fundamentally strong stocks”, Cowry Securities Limited said in its research note.
Stockbrokers said market direction will depend largely on investor response to the IPO, liquidity conditions, and portfolio rebalancing, with a potential recovery once IPO-related pressures ease
