Investors’ rush to raise funds for the Dangote Refinery Initial Public Offering (IPO) triggered five consecutive sessions of losses on the Nigerian Exchange Limited (NGX), wiping N1.58 trillion off the market’s value.

The sell-off came as retail investors, high-net-worth individuals (HNIs) and institutional investors repositioned their portfolios ahead of the October 13 closing date of the offer, with selling pressure spreading across equities, fixed income and the foreign exchange markets.

At the close of trading last week, the All-Share Index (ASI) fell 0.97 per cent to 248,363.55 points, while market capitalisation fell by N1.58 trillion to N161.26 trillion.

Consequently, the market’s year-to-date return moderated to 59.60 per cent.
Executive Director of Halo Capital Management Limited, Dr Paul Uzum, explained that the rush to participate in the Dangote Refinery IPO is creating pressure on the stock market as investors sell existing shareholdings to raise cash for the offer.

He said retail investors, high-net-worth individuals and institutional investors are repositioning their portfolios ahead of the October 13 closing date, driving selling pressure that has contributed to the market’s five consecutive sessions of decline.

He said the impact extends beyond equities, as investors are also liquidating fixed-income investments and selling dollars to obtain the funds needed to subscribe to the offer. This shift across asset classes is pressuring the stock market while redirecting liquidity toward the Dangote Refinery share sale. Investors who would otherwise have retained their positions in listed companies are selling some of their holdings to free up cash for the IPO.

“Many investors, retail, HNIs and Institutional investors, are raising last-minute funds to participate in the offer. The impact can be seen across the financial market, the stock market, the fixed income market, and the forex market.

“Investors are selling off some of these investment classes to raise funds to participate in the offer, triggering a bearish stock market. With the mop of liquidity from the market and approaching 2027 elections, no one is very sure how long the bears will last,” he said.

The development indicates how a major public offering can influence activity across different segments of the financial market, particularly when investors seek to raise substantial funds within a limited period. As the October 13 deadline approaches, the urgency to secure funds for participation could sustain selling pressure on equities, even as investors weigh the IPO’s relative appeal against their existing investments. Uzum’s explanation suggests that the current downturn is linked, in part, to this competition for available investment funds.

He, however, warned that the duration of the bearish trend remains uncertain, given the liquidity being withdrawn from the market and the approaching 2027 general elections.

In addition, Highcap Securities managing director David Adonri attributed the persistent decline in the equities market to a shift in attention toward the Dangote Refinery initial public offering (IPO), which closes on October 13. He said investor enthusiasm was slowing, and the approaching deadline for the offer was drawing attention and funds away from other investment opportunities.

The development illustrates how a major public offer can influence activity across different segments of the financial market, particularly when investors seek to raise substantial funds within a limited period.

A further breakdown of last week’s trading showed that market sentiment remained weak, with 54 stocks declining against 23 gainers, producing a market breadth ratio of 0.43x and indicating that losses substantially outweighed gains.

Trading activity was mixed, with the number of deals and transaction value up 1.65 per cent and 2.14 per cent week-on-week, respectively, while trading volume fell 14.22 per cent. Investors exchanged 2.72 billion shares valued at N158.42 billion in 210,385 deals during the period.

Four of the five major sectors on the Exchange closed in negative territory, reflecting broad-based selling pressure and continued investor caution.

The Oil & Gas sector led the decline, shedding 3.85 per cent as losses in Aradel and Eterna outweighed a four per cent gain in Oando. The Banking sector followed with a 2.64 per cent decline, driven by losses in Fidelity Bank, First HoldCo and GTCO, despite a marginal gain in Zenith Bank.

The Insurance sector fell by 1.74 per cent, as losses in Mansard and Consolidated Hallmark Holdings outweighed gains in Guinea Insurance and Regency Alliance Insurance. Consumer Goods fell by 0.58 per cent, pressured by Nestlé Nigeria, Honeywell Flour Mills, and Unilever Nigeria, despite gains in Multi-Trex and Dangote Sugar Refinery.

Industrial Goods was the only advancing sector, rising marginally by 0.02 per cent as gains in Tripple Gee and CAP offset a decline in Cutix.

Livestock Feeds led the gainers’ table, appreciating by 47.8 per cent during the week. Tripple Gee followed with a 32.6 per cent gain, while Guinea Insurance, Learn Africa and UPDC Real Estate Investment Trust rose by 29.2 per cent, 19.6 per cent and 16.2 per cent, respectively.

On the losers’ table, CMFC recorded the steepest decline of 20.3 per cent, followed by ABC Transport, which fell by 18.2 per cent. Japaul Gold, Fidelity Bank and Aradel Holdings lost 11.1 per cent, 10.6 per cent and 10 per cent, respectively.