The Nigerian equities market recorded another decline for the third consecutive week, reaching a four-week low as bearish sentiment triggered selling pressure and profit-taking.
These factors weighed on benchmark indicators, leading to a 0.55% week-on-week decline to 105,955.13 points. This reflects portfolio rebalancing amidst bargain hunting and anticipation of further corporate earnings reports.
Similarly, market capitalisation fell by 0.55%, amounting to N365.4 billion losses to close the week at N66.35 trillion due to below-average trading volumes and a negative market breadth. Consequently, the year-to-date return on the index moderated to 2.94%.
Despite lacklustre market internals, trading activity remained buoyant but the market breadth remained negative with the emergence of 37 gainers at the close of the week relative to 46 decliners.
However, weekly trading volume surged by 80.45% week-on-week to 3.28 billion units, as investors focused on penny stocks with strong fundamentals in search of alpha.
Additionally, the weekly traded value increased by 34.49% to N63.52 billion from N47.23 billion in the previous week. In contrast, the total number of deals fell by 5.36% week-on-week to 60,782 trades.
Trading data obtained from the Nigerian Exchange Limited (NGX) showed that Sectoral performance was mixed, with three sectors closing in positive territory while the remaining three recorded losses.
The NGX-Insurance sector led the gainers, rising by 0.89% week-on-week due to price appreciations in ROYALEX, CORNERST, and LINKASSURE.
It was followed by marginal gains in the NGX-Consumer Goods and NGX-Commodity indices, which increased by 0.03% and 0.02%, respectively, driven by gains in LIVESTOCK, FTNCOCOA, INTBREW, and OKOMUOIL.
Conversely, the NGX-Oil & Gas index led the laggards, declining by 1.15% week-on-week due to sell-offs in CONOIL, OANDO, and TOTAL.
The NGX-Banking and NGX-Industrial indices also posted losses of 0.45% and 0.21%, respectively, as investors reduced their holdings in BERGERPAINTS, JAIZBANK, RTBRISCOE, UBA, and FIRSTHOLDCO.
Among the best-performing stocks of the week, LIVESTOCK FEEDS, CAVERTON, FTN COCOA, CWG, and TANTALIZER led the pack with respective gains of 22.2%, 15.4%, 14.2%, 13.2%, and 13.1%.
On the flip side, NEIMETH, MECURE, INTENEGINS, CONOIL, and UPL emerged as the worst-performing stocks, shedding 17.0%, 10.4%, 10.3%, and 10.0% each.
Remarks
Investment analysts noted that the continued challenges faced by the local equities market week-on-week as global market trends exert pressure in a mixed fashion.
They explained that the imposition of tariffs by United States President, Donald Trump on imports from China, Mexico, Canada, and the European Union contributed to volatile investor sentiment.
Looking ahead, analysts at Cowry Assets anticipate continued mixed sentiment as the market undergoes corrections, placing the exchange in an overbought region.
“Profit-taking, portfolio reshuffling, and bargain hunting are likely to persist as investors digest corporate actions and Q1 earnings forecasts,” they said.
They further added that the release of the Consumer Price Index (CPI) report for February 2025 will be a key driver of market direction, as investors assess its implications for their portfolios.
In a similar move, market experts at Cordros Capital said: “We expect market sentiment to be shaped by investors’ reactions to the February inflation report expected next week, and direction of yields in the fixed income market.
“However, we do not rule out potential bargain-hunting in some banking names, as recent selloffs suggest attractive re-entry opportunities.”
