Investors lose N1.4 trillion amid sell-off in blue-chip companies

In response to the consumer price inflation report for December 2024, which put inflation at is34.8 per cent, the Nigeria equities market closed last week trading on a downturn as investors lost N1.4 trillion in five trading days.

Last week’s negative sentiment was primarily driven by widespread selloffs across most sectors, except the consumer goods space.

The market capitalisation of listed equities which reopened for transactions at N64.25 trillion last week Monday, closed on Friday at N62.85 trillion, shedding N1.4 trillion while the all-share index (ASI) depreciated by 3,003.57 or 2.2 per cent from 105,367.25 points to 102,353.68 points.

Market sentiment throughout the week remained mixed, with a significant 41.4 per cent drop in the weekly traded volume, which fell to 2.25 billion units. The traded value also saw a decline of 18.1 per cent, totalling N58.83 billion. A total of 63,650 trades were executed during the week, further indicating a subdued market.

The sectoral performance last week was subdued, with four out of the five observed sectors ending in negative territory. The NGX consumer goods index stood out as the sole gainer, recording a 1.3 per cent week-on-week increase.

The performance was driven by strong investor interest in key stocks such as NNFM, Neimeth Dangote Sugar Refinery and National Salt Company of Nigeria (NASCON).

In contrast, the NGX industrial and NGX insurance indices suffered the sharpest declines, falling by 8.2 per cent and 6.23 per cent week-on-week, respectively.

The losses were largely due to significant selloffs in major stocks like Dangote Cement, Julius Berger, Universal Insurance and Sovereign Trust Assurance.

The NGX oil and gas and NGX banking indices also ended the week on a downturn, with declines of 0.8 per cent and 0.5 per cent week-on-week, respectively.

These losses were attributed to price drops in stocks such as Aradel, MRS, FBNH and Wemabank.

On the price movement chart, sell pressures on Dangote cement (-16.5 per cent), TRANSCORP (-8.8 per cent), MTNN (-3.7 per cent) and FBNH (-3.3 per cent) impacted negatively on market performance.

As a result, year-to-date returns moderated to -0.6 per cent while trading activities were also subdued, with trading volume and value declining by 52.4 per cent w/w and 31.2 per cent w/w, respectively.
On market outlook, analysts at Cowry Asset Management Limited said it anticipated that the market may experience a mixed performance in the coming week.

According to him, 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.

Codros Capital said: “In the week ahead, we anticipate choppy trading activities in the market as investors continue to rebalance their portfolios for the year. Profit-taking is likely to persist in specific segments of the market, while undervalued and beaten-down names may see renewed buying interest.”

A total turnover of 2.2 billion shares worth N58.8 billion was recorded in 63,657 deals by investors on the floor of the Exchange, in contrast to a total of 4.698 billion shares valued at N85 billion that changed hands in 72,562 deals during the preceding week.

The financial services Industry (measured by volume) led the activity chart with 1.3 billion shares valued at N22 billion traded in 26,114 deals, thus contributing 60.86 per cent to the total equity turnover volume and value respectively. Consumer goods followed with 253.5 million shares worth N15.2 billion in 8,869 deals.

The services industry ranked third with a turnover of 193.4 million shares worth N931 million in 4,716 deals.
Trading in the top three equities namely Universal Insurance Plc, Guaranty Trust Holding Company Plc and AIICO Insurance Plc (measured by volume) accounted for 468.315 million shares worth N9.007 billion in 3,568 deals, contributing 20.8 per cent to the total equity turnover volume.