Market Records Second Straight Decline
The bearish momentum on the Nigerian Exchange (NGX) deepened on Wednesday as equities shed N663bn in market value amid sustained sell pressure from investors.
At the close of trading, the market capitalisation of listed equities fell to N89.6tn from N90.3tn in the previous session. The All-Share Index (ASI) dropped by 1,047.19 points, or 0.73 per cent, to settle at 141,566.28 basis points. This reflects a one-week loss of 2.95 per cent, even though the market still posted a four-week gain of 6.8 per cent and a year-to-date growth of 37.54 per cent.
Slump in Trading Activity
Investor participation also weakened. A total of 721.8m shares worth N12.93bn were exchanged in 28,728 deals, representing a 30 per cent decline in volume, 27 per cent drop in value, and 16 per cent fall in deals compared with Tuesday’s session.
Out of the 129 equities traded, 18 gained, while 51 closed lower.
Top Gainers and Losers
Austin Laz & Company topped the gainers’ chart with a 10 per cent rise to close at N2.64 per share. It was followed by Champion Breweries, up 9.97 per cent to N19.74, NCR Nigeria, which appreciated 9.77 per cent to N9.55, and Multiverse Mining & Exploration, which gained 8.82 per cent to N11.10.
On the downside, Conoil was the worst-hit, losing 9.98 per cent to close at N211.10 per share. Guinness Nigeria also shed 9.98 per cent to N140.20, while Consolidated Hallmark Holdings declined 9.94 per cent to N4.35. Royal Exchange followed closely, dropping 9.92 per cent to N2.27 per share.
Volume and Value Leaders
On the activity chart, Champion Breweries recorded the highest volume with 54.5m shares traded, followed by Universal Insurance Company (47.8m), Royal Exchange (46.2m), and Regency Alliance Insurance (40.8m).
In terms of value, Zenith Bank led with N1.26bn worth of transactions, followed by MTN Nigeria (N1.25bn), Champion Breweries (N988.3m), Guaranty Trust Holding Company (N941.9m), and Stanbic IBTC Holdings (N773m).
Sectoral Performance
Sectoral indices closed mixed. The NGX Top 30 Index declined 0.66 per cent, the Industrial Index slipped 0.01 per cent, the Pension Index lost 0.83 per cent, and the Main Board Index fell 1.16 per cent. However, the Premium Index advanced 0.12 per cent, while the Oil and Gas Index recorded a mild 0.11 per cent gain.
Profit-Taking Weighs on Market
Market analysts attributed the extended losses to profit-taking after the strong rally recorded earlier in the year. On Tuesday, the NGX had already closed in negative territory, shedding N1.33tn in market capitalisation as sell-offs in Dangote Cement and banking stocks dragged the market down.
Financial analyst Olaid Baanu noted that the correction was inevitable given the performance of high-capitalisation stocks in recent months.
“We have seen the rally for a while, like in May, June and July, and we recorded some gains, especially in high-cap stocks. It is expected that, for the health of the market, prices should drop so we can see more opportunities. We expect the profit-taking,” he said.
Outlook
Despite the ongoing sell-offs, analysts believe the pullback could open the door for bargain-hunting and fresh opportunities, particularly as fundamentals of many companies remain intact.