The Nigerian Exchange Limited (NGX) extended its negative sentiments last week, as investors’ wealth declined further by N832 billion, amid weak investor appetite for equities, coupled with risk-off positioning that dominated trading activity.
The NGX all-share index (ASI) dropped by 0.94 per cent on a week-on-week basis, falling from 140,295.49 points in the previous week to 138,980.01 points.
Similarly, market capitalisation declined from N88.77 trillion to N87.94 trillion, bringing the year-to-date return down to 35.03 per cent. Market activity also reflected the downbeat mood. The number of deals executed during the week fell by 17.43 per cent to 117,791, while the volume of shares traded declined by 2.66 per cent to 3.11 billion units.
However, despite reduced participation, market turnover rose by 5.53 per cent to N90.2 billion, indicating that trades were skewed toward higher-value stocks.
Market breadth remained notably weak at 0.30x, with only 19 gainers compared to 63 decliners, reinforcing the dominance of bearish sentiment across listed equities. Sectoral performance further illustrated the market’s widespread softness, with five out of six tracked indices closing in negative territory.
The industrial goods index suffered the steepest weekly loss, falling 2.08 per cent, driven by sustained sell pressure on mid- to large-cap stocks. The banking index followed closely, declining 1.52 per cent, as investors remained cautious on financial stocks due to ongoing liquidity constraints and elevated funding costs.
Other sectors were similarly impacted: the consumer goods index shed 1.18 per cent, the oil & gas Index declined by 0.77 per cent, and the insurance index fell by 0.36 per cent.
The only bright spot was the commodity index, which managed a marginal gain of 0.04 per cent, though it did little to lift overall market sentiment.
At the stock level, price movements reflected a mixed performance, with only a handful of gainers standing out amid a broader wave of declines. Leading the chart were Sovereign Trust Insurance, which rose by 14.2 per cent, NSLTECH with a gain of 12.9 per cent, Cornerstone Insurance up by 12.4 per cent, NCR appreciating by 10 per cent, and SCOA also advancing by 10 per cent.
On the other hand, several stocks suffered significant losses. DAAR Communications topped the laggards with a decline of 21.1 per cent, followed by UPDC, which shed 13.8 per cent. AIICO Insurance lost 13.6 per cent, while Champion Breweries and PZ Cussons both declined by 13.3 per cent.
These losses underscore the sustained pressure across sectors and a continued reluctance among investors to increase equity exposure in the face of prevailing market uncertainties.
Analysts at Cowry Asset Management Limited projected a cautious outlook for the Nigerian equities market in the coming week, anticipating that investor sentiment will likely remain subdued in the face of persistent macroeconomic headwinds.
According to the firm, ongoing currency pressures, heightened inflation expectations and uncertainty surrounding the direction of monetary policy are expected to keep investors on the sidelines.
While Cowry acknowledges that bargain hunting in oversold stocks could spark mild recoveries in select counters, it expects the broader market to remain bearish.
The analysts noted that the stark divide between a few outperformers and a large number of laggards reflects continued investor wariness, with negative sentiment still driving sectoral flows.
Considering the prevailing conditions, Cowry Asset Management reiterated its advice for investors to focus on fundamentally strong stocks, urging them to remain selective and long-term in their approach.
According to Cordros Capital, investor sentiment in the near term is expected to remain cautious, as market participants continue to engage in profit-taking and selectively reposition their portfolios toward fundamentally sound stocks that present attractive entry opportunities.
Cordros noted that over the medium term, the direction of the equity market will largely be influenced by broader macroeconomic dynamics and the movement of fixed income yields, which they identified as critical factors shaping relative asset allocation decisions across investment classes.
