Top stocks experience selloffs, leading to investors losing N784 billion.
Last week, investors incurred losses amounting to N784 billion on the stock market due to a sell-off in shares of several highly capitalized stocks. Despite indications of recovery in some banking securities, which had previously contributed to the market’s weak performance, the sell-offs persisted, keeping the stock market in negative territory.
Investment analysts had anticipated profit-taking activities following recent announcements regarding the suspension of the Dangote Foods merger and ongoing reactions to the banking sector recapitalization.
The Nigerian Exchange Limited (NGX) All Share Index (ASI) declined by 1.39 percent to 98,152.91 points, primarily driven by losses in MTN Nigeria Communication Plc, FBN Holdings Plc, and Nestle Nigeria Plc, which depreciated by 9.8 percent, 16.3 percent, and 11.6 percent, respectively. However, there was a recovery in Guaranty Trust Company (GTCo) Plc, which rose by six percent, Stanbic IBTC (3.6%), and Zenith Bank Plc (1.6%).
Consequently, the market capitalization of listed equities dropped to N55.512 trillion from N56.296 trillion, reflecting a 1.39 percent decline.
Sectoral analysis revealed that the banking sector experienced the most significant decline, dropping by 3.1 percent, followed by the oil and gas sector with 1.4 percent, while the consumer goods sector recorded a 1.2 percent decline. Conversely, the industrial goods sector advanced by 0.4 percent, while the insurance sector remained flat.
Trading activity saw an increase, with a 15.2 percent rise in total trading volume and a 6.0 percent increase in trading value to 1.839 billion units and N34.25 billion, respectively.
Analysts at Cordros Capital suggested that the current negative trend may persist in the short term in the absence of positive catalysts to drive a rebound. They noted that the favorable entry points of beaten tickers could prompt bouts of recovery as investors weigh earnings releases.
Further breakdown of the week’s trading revealed that the financial services sector led the activity chart by volume, with 1.129 billion shares valued at N22.290 billion traded in 22,008 deals, contributing 61.38 percent and 65.06 percent to the total equity turnover volume and value, respectively. The conglomerates sector followed, with 194.179 million shares worth N2.822 billion traded in 1,923 deals, while the construction/real estate sector ranked third with a turnover of 130.702 million shares worth N649.957 million in 556 deals.
