The Nigerian Exchange (NGX) experienced a sharp downturn this week, with investors withdrawing over N532 billion, as market sentiment turned decidedly bearish. The NGX All-Share Index fell by 0.94% to close at 104,962.96 points, marking a continuation of the market’s recent decline.
Analysts attribute the sell-off to investor reactions to global economic uncertainties, despite positive domestic macroeconomic indicators such as easing inflation. Cowry Asset Management Limited noted that the “positive real return on investment environment” failed to counteract the prevailing bearish sentiment.
The year-to-date return on the All-Share Index has now moderated to 1.98%, reflecting the persistent sell pressure across various sectors. The market breadth remained negative, with 47 stocks declining in value compared to 32 gainers.
Trading activity also saw a decline, with the total number of deals dropping by 6.15% to 57,043 transactions. The total volume and value of traded stocks decreased by 11.55% and 24.33%, respectively.
Sector-wise, the NGX Consumer Goods Index was the only sector to record a marginal gain (0.06%), driven by stocks like Neimeth and Dangote Sugar. However, the NGX Industrial Index suffered the most significant losses, declining by 3.39%, followed by the NGX Insurance and Banking Indices, which fell by 2.87% and 2.55%, respectively.
Notable decliners included ETranzact International, which plummeted by 26.2%, and Livestock Feeds, which fell by 17.5%. Conversely, Neimeth International Pharmaceuticals emerged as the top gainer, rising by 20.5%.
Cowry Asset Management Limited suggests that the market is now in an oversold state, potentially presenting buying opportunities for strategic investors, particularly in dividend-paying stocks. The firm anticipates continued market corrections and portfolio adjustments as investors digest corporate earnings and macroeconomic data.
Looking ahead, the market’s trajectory will likely be influenced by global financial markets, Central Bank of Nigeria (CBN) monetary policy decisions, and investor confidence in Nigeria’s economic outlook.
