Stock Market Down N539bn WoW as Investors Trade with Caution

Kayode Tokede   

The stock market of the Nigerian Exchange Limited (NGX) dropped by N539billion Week-on-Week (WoW) as local and foreign investors remain cautious amid prevailing macroeconomic uncertainties, with many seeking to rebalance their portfolios in light of global and domestic economic challenges.

The decline in market capitalisation was primarily driven by profit-taking in large-cap stocks, further eroding investors confidence.

This decline reflects renewed bearish sentiment, as sell-offs across key sectors like the banking and industrial goods weighed on market performance.

The overall market capitalisation that opened for trading at N56.578 trillion, dropped by N539billion to close the week at N56.039 trillion

Also, the benchmark index, Nigerian Exchange Limited All-Share Index (NGX ASI) declined by 0.95 per cent W-o-W to close at 97,520.54 basis points from 98,458.68 basis points it opened for trading.  

Across the sectoral spectrum, performance was in the mixed bag. The NGX Oil & Gas and NGX Insurance indices led the charge with weekly gains of 7.29 per cent and 3.81 per cent. Also, the NGX Consumer Goods index recorded a weekly gain of 0.34 per cent.

On the contrary, the NGX Industrial Goods and NGX Banking indices closed the week down by 6.84 per cent and 0.74 per cent respectively.

The market breadth for the week was positive as 45 equities appreciated in price, 33 equities depreciated in price, while 73 equities remained unchanged.

Deap Capital Management & Trust led the gainers table by 31.53 per cent to close at N1.46, per share. Seplat Energy followed with a gain of 21.00 per cent to close at N4,964.70, while Tripple Gee and Company went up by 20.34 per cent to close to N4.97, per share.

On the other side, McNichols led the decliners table by 15.63 per cent to close at N1.35, per share. Fidelity Bank followed with a loss of 13.33 per cent to close at N13.00, while Dangote Sugar Refinery declined by 12.20 per cent to close at N30.60, per share.

Overall, a total turnover of 2.872 billion shares worth N132.811 billion in 39,867 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.318 billion shares valued at N45.911 billion that exchanged hands previous week in 49,243 deals.

The Consumer Goods Industry (measured by volume) led the activity chart with 1.341 billion shares valued at N106.099 billion traded in 4,652 deals; contributing 46.68 per cent and 79.89 per cent to the total equity turnover volume and value respectively. The Financial Services Industry followed with 926.615 million shares worth N14.924 billion in 19,174 deals, while the Oil and Gas Industry traded a turnover of 244.638 million shares worth N7.221 billion in 4,221 deals.

Trading in the top equities; Guinness Nigeria, United Bank for Africa (UBA) and Japaul Gold & Ventures (measured by volume) accounted for 1.708 billion shares worth N110.766 billion in 5,004 deals, contributing 59.47 per cent and 83.40 per cent to the total equity turnover volume and value respectively.

Meanwhile, stock market analysts expects positive sentiments in the market this week.

“We anticipate a positive outing for the local bourse as we see the local bourse showing signs of recovery heading into the final quarter of the year, while the market awaits the nine months performance scorecards of some of the early filers such as Geregu Power, Dangote Cement, Dangote Sugar Refinery, MTN Nigeria Communications (MTNN), amongst others. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks,” said analysts at Cowry Assets Management Limited.

Speaking, the Chief Operating Officer of InvestData Consulting Limited, Mr. Ambrose Omordion said, “we expect mixed sentiment to continue on profit taking and portfolio rebalancing ahead of Q3 earnings reporting session. Also, sector rotation continues in the market, with investors taking advantage of pullbacks to buy into value.

“This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”

On their part, ana;ysts at Afrinvest Limited stated, “In October, despite pressure from upward repricing of fixed-income yields, we expect a bullish performance in the domestic equities market in October. Specifically, we anticipate long positioning for Q3 earnings and announcement of banking interim dividends to be major catalysts.”