Investors on the Nigerian Exchange Limited (NGX) witnessed a significant downturn last week, with a staggering N847 billion wiped off the market’s capitalisation.
The drop was primarily driven by profit-taking activities and widespread selloffs across various sectors.
The NGX market capitalisation, which measures the total value of all investments on the Exchange, fell to N55.131 trillion by the end of trading on Friday.
This marks a notable decline from the N55.978 trillion recorded the previous week, underscoring the impact of investor caution.
In parallel, the NGX All Share Index (ASI), another key market indicator, also recorded a 1.5% drop, closing the week at 97,100.31 points. This is a significant decrease from the 98,592.12 points registered in the preceding week.
Profit-Taking Creates Opportunities
The wave of profit-taking across major sectors of the market has presented opportunities for savvy investors to acquire value stocks at discounted prices.
However, the overall market sentiment remains bearish as investors adopt a more cautious approach.
Meanwhile, several companies have continued to notify the Exchange of their upcoming Annual General Meetings (AGMs).
Among the latest is FBN Holdings, while Airtel Africa continues to update the market on its ongoing share buyback programme.
Market Analysis and Sector Performance
Market analysis for the Month-to-Date (MtD) and Year-to-Date (YtD) returns showed a moderation to -0.7% and +29.9%, respectively.
Additionally, trading volumes and values saw a decline of 24.1% and 1.4% Week-on-Week (W/W), respectively.
Sector performance was mixed, with the Oil & Gas Index leading the gains, rising by 5.3%.
The Insurance Index and Consumer Goods Index also posted gains of 0.8% and 0.4%, respectively.
Conversely, the Industrial Goods Index and Banking Index recorded losses, shedding 5.2% and 2.3%, respectively.
Analysts’ Outlook
Looking ahead, analysts at Cordros Research predict that bearish sentiments will continue to dominate the market.
“We still expect bearish sentiments to remain the key theme as investors remain cautious and continue to exhibit weak appetite for equities,” they noted.
The analysts further suggested that developments in the macroeconomic landscape and the corporate actions tied to the upcoming earnings season will play a crucial role in shaping investor sentiment in the near term.
