Nigerian Exchange Shrinks as Equities Investors Lose N1.45trn
The market value of all listed companies on the Nigerian Exchange (NGX) trading platform reduced to about N62.9 trillion as equities investors lost N1.45 trillion. The local bourse traded negatively as investors reacted negatively to inflation surge, as per data from the National Bureau of Statistics report, which showed the consumer price index rose to 24.80% in December.
Hence, the Nigerian Exchange benchmark index declined by 2.94% week on week, closing at 102,353.68 points. The decline was primarily driven by widespread sell-offs across most sectors, with the exception of the consumer goods space, Cowry Asset Limited said in a note.
Stockbrokers said investors’ sentiment throughout the week was mixed, with both buying and selling activities taking place, reflecting uncertainty in the local economy.
Equities market capitalisation shrank by 2.26%, a weekly loss of N1.45 trillion, bringing the total market value down to N62.85 trillion.
Trading activities were weak, as evidenced by a significant 41.4% drop in the weekly traded volume which settle at 2.25 billion units.
Stockbrokers said the traded value also saw a decline of 18.1%, totaling N58.83 billion. A total of 63,650 trades were executed during the week, further indicating subdued market participation, according to Cowry Asset.
Sectoral performance was lackluster, with four out of the five sectors under observation closing in negative territory. The consumer goods index was the only exception, posting a positive gain of 1.33% week on week.
This was largely driven by investor interest in major stocks such as NNFM, NEIMETH, DANGSUGAR, and NASCON. On the contrary, the industrial and insurance sectors suffered the steepest declines, losing 8.20% and 6.23% week on week, respectively, stockbrokers said.
The downturn in these sectors was primarily due to sell-offs in key bellwethers such as DANCEM, JULIUS BERGER, UNIVINSURE, and SOVRENINS. The Oil & Gas and Banking sectors also experienced losses, though to a lesser extent, down by 0.78% and 0.46% week on week, respectively. This was attributed to negative price movements in stocks like ARADEL, MRS, FBNH, and WEMABANK.
Weekly gainers include NEIMETH (31.4%), SCOA (20.4%), NNFM (19.5%), LIVESTOCK (17.6%), and DANGSUGAR (16.7%) attracted significant attention from investors. Top losers include UNIVINSURE (19.2%), ROYALEX (18.3%), REGALINS (17.8%), SOVRENINS (16.7%), and DANGCEM (16.5).
Stockbrokers at Cowry Asset Limited anticipated that the market may experience a mixed performance in the coming week. “While some degree of bargain hunting is expected as investors search for attractive entry points, much of the direction will be shaped by the anticipated earnings reports and the broader macroeconomic outlook”.
Cowry Asset Limited said despite the challenges presented by this week’s market pullbacks, which were largely driven by profit-taking and sell-offs, there may be buying opportunities for discerning investors.
Stockbrokers said these opportunities are especially apparent for those who are looking to capitalise on low valuations and market volatility ahead of the upcoming Q4 earnings season.
The combination of mixed macroeconomic data and a series of anticipated economic events, such as the upcoming Monetary Policy Committee (MPC) meeting, is likely to continue influencing market dynamics. #Nigerian Exchange Shrinks as Equities Investors Lose N1.45trn $9.6bn P&ID Scam: I’ve No Witness to Call, Briton Tells Court
