NGX market downturn wipes N421bn off investors’ portfolios

Onome Amuge

The Nigerian equities market experienced a sell-off during the most recent trading week, resulting in a loss of N421 billion for investors on the Nigerian Exchange (NGX) trading floor.

The decline was a stark departure from the previous week’s performance, where investors had celebrated a gain of N196 billion.

The NGX  witnessed a decline in market capitalisation during the past trading week, dropping from N67.614 trillion to N67.193 trillion. This contraction was accompanied by a 0.62 percent drop in the All-Share Index (ASI), which dipped from 108,497.40 points to 107,821.39 points over the same period.

Trading activity on the NGX also declined during the recent week, with investors exchanging a total of 1.848 billion shares worth N51.387 billion in 63,090 deals. This activity represented a decrease from the previous week’s total of 2.001 billion shares valued at N49.486 billion traded in 70,853 deals.

The Financial Services Industry (FSI) emerged as the most active sector in terms of trading volume and value, capturing 70.13 percent and 52.38 percent of the total equity turnover volume and value, respectively, during the past week. The dominance was reflected in 1.296 billion shares, valued at N26.914 billion, changing hands across 29,140 deals.

The Services Industry ranked second in terms of trading activity, with 129.443 million shares valued at N719.218 million changing hands in 3,657 deals, followed by the Consumer Goods Industry, which recorded 116.696 million shares worth N4.185 billion across 7,452 deals.

The performance of Nigerian equities across the board saw a mixed bag during the past trading week, with 27 stocks recording price appreciation, lower than the 28 stocks that appreciated the previous week. Meanwhile, 60 stocks recorded price depreciation, indicating an increase from the 58 stocks that depreciated the week before. Furthermore, 63 equities remained flat, indicating a decrease from the 64 equities that did not see any change in price the previous week.

Trading activity in the top three equities by volume was dominated by Zenith Bank Plc, FCMB Group Plc, and Access Holdings Plc during the past trading week, accounting for 29.21 percent and 32.16 percent of the total equity turnover volume and value, respectively.

These financial sector heavyweights saw a total of 539.768 million shares valued at N16.528 billion exchanged in 7,392 deals.

P Z Cussons Nigeria Plc emerged as the biggest gainer with a 31.11 percent increase in its share price, followed closely by Caverton Offshore Support Group Plc which recorded a 22.92 percent increase in its share price. Livestock Feeds Plc rounded off the top three gainers, with its share price appreciating 22.81 percent.

The trading week also saw a number of Nigerian equities taking a hit to their share prices. Sunu Assurance Nigeria Plc suffered the worst hit with a 19.55 percent decline in its share price, closely followed by Eunisell Interlinked Plc, which saw its share price shed 18.67 percent, while Learn Africa Plc had its share prices down 16.46 percent.

According to Cowry Asset Management’s analysts, investors in the Nigerian equities market can anticipate a mixed performance in the coming week, characterised by a combination of profit-taking activities and potential stock price recoveries.

While profit-taking activities may continue to exert pressure on stock prices, the analysts predict that there is a possibility of a slight rebound as investors adjust their portfolios based on company earnings results.

Furthermore, it is also anticipated that the influx of audited corporate earnings reports will shape investors’ sentiment particularly toward stocks with solid fundamentals.

In light of this development, the analysts advised investors to remain vigilant and focus their attention on stocks that possess strong fundamentals.