The negative mood caused equity investors to lose almost N290 billion as the Nigerian Exchange (NGX) keeps losing ground. Rapid stock market selling has occurred on the local exchange amid the fixed income market’s high yield.
The benchmark index has declined as a result of the local exchange’s ongoing volatility amid a selling attitude that has pervaded most key market sectors.
According to Cowry Asset Management Limited’s market report, market participants responded to a number of variables, such as the Central Bank of Nigeria’s (CBN) recent policy rate rise and the most recent macroeconomic statistics, which showed a modest but solid GDP growth of 2.98% for the first quarter of 2024.
Stockbrokers said the bearish trend was compounded by the outcome of the midweek Nigerian Treasury Bills auction, which negatively impacted the composite benchmark index, resulting in a 0.52% week-on-week decline to 97,612.51 points, breaking a previously range-bound market.
The market recorded gains on only two out of the five trading sessions in the just-concluded week. Despite these losses, the year-to-date return for the benchmark index marginally decreased to 30.5%, stockbrokers said in their separate reports.
Amidst the continued flight to safety, trading activity this week showed mixed results. Investment firms noted that traded volume increased by 20.22% week-on-week, reaching 1.98 billion units across 38,487 deals, representing a slight 0.96% rise from the previous week.
However, the traded value fell by 4.60% week-on-week to N40.72 billion. NGX data showed that market breadth ended the week on a negative note, with 53 stocks declining compared to 25 gainers.
On the other hand, sectoral performance was positive. The Oil and Gas, Consumer Goods, and Industrial indices reported gains of 0.72%, 0.31%, and 0.19%, respectively, driven by positive price movements in Julius Berger, UPDC, Nestle, and Lafarge, Cowry Asset said in a note.
Conversely, the banking index fell by 6.16%, influenced by declines in FBNH, ETI, and GTCO, while the insurance index dropped by 3.50%, affected by losses in MBENEFIT.
Among the top performers of the week, Berger Paints led with a 21% week-on-week increase, followed by REGALINS with 19%, INTENEGINS with 12%, CUTIX with 10%, and both McNICHOLS and NESTLE rising by 10%.
On the other hand, the worst performers included DEAPCAP, which saw its share price fall by 25%, FTN COCOA with a 17% decline, TRANSCORP with a 12% drop, and both UBA and UPDC underperforming with declines of 12% and 11%, respectively.
“Looking ahead, the market is expected to maintain a weak sentiment as investors continue to digest the latest economic data from the statistics bureau, the recent interest rate hike by the monetary policy committee, and their attendant impact on investments,” Cowry Asset said in its report.
Overall, the equities market capitalization lost N290.1 billion, falling to N55.22 trillion from N55.51 trillion the previous week.
