Ahead of the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering (IPO), scheduled to open today, the Nigerian equities market lost N1.96 trillion last week to broad sell-offs by retail investors.

Consequently, the market capitalisation fell to N157.59 trillion, while the benchmark Nigerian Exchange (NGX) All-Share Index (ASI) declined by 1.6 per cent week-on-week to close at 243,052.74 points.

The decline moderated the market’s year-to-date (YTD) return to 56.19 per cent, reflecting growing pressure on equities with investors positioning for the much-awaited Dangote Refinery offer.

Market breadth was also weak, with only nine stocks recording gains against 80 losers during the week, resulting in a breadth ratio of 0.11x. The wide gap between gainers and losers showed the extent of the negative sentiment across the market.

Trading activity was mixed, as the number of deals rose by 9.61 per cent week-on-week, while trading volume and value fell by 16.36 per cent and 38.15 per cent respectively.

In all, investors exchanged 3.65 billion shares worth N130.27 billion in 245,512 deals during the week.

The decline in market capitalisation was also affected by the supplementary listing of 8.09 billion Dangote Sugar shares and an additional 355,531 scrip units of Chapel Hill Denham NIDF.

Sector performance was negative as four of the six sectors closed lower. The insurance sector closed lower at the end of last week’s transactions on the trading floor of the Nigerian Exchange (NGX) by 5.52 per cent following price depreciation in FTGinsure, Sunu Assurance, Intenegins and Guinea Insurance.

The banking sector followed with a 4.07 per cent decline, driven by sell-offs in Firstholdco, FCMB, Fidelity Bank and Accesscorp. The performance of the two sectors increased selling pressure in the market.

In addition, industrial goods also declined by 3.36 per cent on losses in Austinlaz, Cap, BUA Cement and TrippleG.
Consumer Goods also recorded a 2.55 per cent decline on profit-taking in Champion, MCNichols, Cadbury, NB and Nestle.

However, sustained investor demand for Seplat lifted the oil&gas sector by 2.83 per cent, while the commodity sectors also increased by 2.19 per cent.

On the individual stocks chart, Ngxgroup emerged as the week’s best performer, gaining 13.8 per cent. Ellahlakes followed with a 13.3 per cent increase, while Seplat, Etranzact and Ikejahotel rose by 10.0 per cent, 5.7 per cent and 4.6 per cent respectively.

Research Analyst at Cowry Asset Management Limited, Charles Abuede, said the Nigerian equities market is likely to remain volatile and cautious in the near-term as investors reposition ahead of the Dangote Refinery IPO.

He said continued profit-taking and rotation of liquidity into the offer could put further pressure on the market, although the sell-off may create selective buying opportunities in fundamentally strong stocks.