Stock Market Down N539bn WoW as Investors Trade with Caution

In a recent interview, Kayode Tokede shared his insights on the current state of the Nigerian Exchange Limited (NGX) stock market, which has experienced a substantial decline of ₦539 billion week-on-week. He noted that both local and foreign investors are exercising caution due to ongoing macroeconomic uncertainties, prompting many to re-evaluate their portfolios in the face of global and domestic economic challenges.

“The drop in market capitalization was primarily driven by profit-taking in large-cap stocks, which has further eroded investor confidence,” Tokede explained. He observed that this downturn signifies a resurgence of bearish sentiment, with sell-offs affecting key sectors such as banking and industrial goods, thereby negatively impacting overall market performance. The market capitalization, which began the week at ₦56.578 trillion, fell to ₦56.039 trillion by week’s end. Additionally, the Nigerian Exchange Limited All-Share Index (NGX ASI) decreased by 0.95 percent, closing at 97,520.54 basis points, down from an opening level of 98,458.68 basis points.

When discussing sector performance, Tokede described it as a mixed picture. The NGX Oil & Gas and NGX Insurance indices recorded gains of 7.29 percent and 3.81 percent, respectively, while the NGX Consumer Goods index saw a slight increase of 0.34 percent. In contrast, the NGX Industrial Goods and NGX Banking indices faced declines of 6.84 percent and 0.74 percent, respectively.

“The market breadth was somewhat positive,” he added, pointing out that 45 stocks experienced price increases, 33 reported declines, and 73 remained unchanged. Deap Capital Management & Trust led the gainers’ list with a remarkable 31.53 percent rise, closing at ₦1.46 per share. Seplat Energy followed closely, gaining 21.00 percent to finish at ₦4,964.70, while Tripple Gee and Company increased by 20.34 percent, ending the week at ₦4.97.

On the flip side, McNichols spearheaded the decliners, dropping 15.63 percent to ₦1.35 per share. Fidelity Bank experienced a 13.33 percent decline, closing at ₦13.00, while Dangote Sugar Refinery fell by 12.20 percent to ₦30.60 per share.

In terms of trading activity for the previous week, investors exchanged a total of 2.872 billion shares valued at ₦132.811 billion across 39,867 deals, a decrease from the 3.318 billion shares worth ₦45.911 billion traded the week before in 49,243 deals. The Consumer Goods Industry led the activity chart with 1.341 billion shares traded, worth ₦106.099 billion, accounting for 46.68 percent of total turnover volume. The Financial Services Industry followed, with 926.615 million shares valued at ₦14.924 billion.

Stock market analysts maintain a cautiously optimistic outlook. “We expect to see a positive trend in the market as we approach the final quarter of the year,” remarked analysts from Cowry Assets Management Limited. They pointed out that investors are anticipating the performance reports of early filers like Geregu Power and Dangote Cement, advising a focus on fundamentally sound stocks.

Ambrose Omordion, Chief Operating Officer of InvestData Consulting Limited, added, “We anticipate mixed sentiments to persist, driven by profit-taking and portfolio rebalancing. Given the current volatility, investors should look to seize opportunities during price corrections.”

Analysts from Afrinvest Limited also expressed optimism, forecasting a bullish performance in October despite pressures from rising fixed-income yields. They believe that positioning for Q3 earnings and upcoming bank interim dividend announcements will serve as significant catalysts for the market.