KEY POINTS
- The NGX All-Share Index fell 0.02 per cent to 254,245.21 points on the first trading session of November.
- Market capitalisation declined by N35 billion to N165.08 trillion.
- Decliners outnumbered gainers, with 41 stocks losing ground against 21 that advanced.
- Trading volume fell 48.2 per cent to 517.26 million shares.
- Cowry Assets Management expects selling pressure and weak market breadth to constrain a near-term recovery.
MAIN STORY
The Nigerian stock market opened November on a negative note as losses in heavyweight stocks pushed the benchmark All-Share Index lower, despite the market retaining a strong year-to-date return.
The Nigerian Exchange Limited (NGX) All-Share Index declined by 0.02 per cent to close at 254,245.21 points, while market capitalisation shed N35 billion to settle at N165.08 trillion.
Despite the marginal daily decline, the market’s year-to-date return stood at 63.38 per cent.
The downturn was driven by price depreciation in large and medium-capitalised companies, including Aradel Holdings, Nestle Nigeria, Vitafoam Nigeria, Zenith Bank and Guaranty Trust Holding Company (GTCO).
Market breadth remained negative, with 41 stocks recording losses compared with 21 gainers, indicating that selling pressure extended beyond a handful of companies.
Consolidated Hallmark Insurance led the gainers, rising 10 per cent to close at N7.15 per share. Livestock Feeds followed with a 9.77 per cent increase to N14.60, while AXA Mansard Insurance gained 9.30 per cent to N11.75.
UPDC advanced 7.46 per cent to N3.60, while NPF Microfinance Bank rose 7.14 per cent to N4.50 per share.
On the losing side, Champion Breweries and Uni Assurance topped the decliners, each shedding 10 per cent to close at N8.10 and N2.70 respectively.
Aradel Holdings followed with a 9.99 per cent decline to N1,296.00, while Vitafoam fell 9.97 per cent to N157.20. Cornerstone Insurance also lost 9.89 per cent to close at N4.10 per share.
Trading activity weakened during the session. Total volume traded fell by 48.2 per cent to 517.26 million shares, valued at N47.48 billion across 54,015 deals.
Honeywell Flour Mills recorded the highest volume, with 74.185 million shares worth N1.793 billion traded. Access Holdings followed with 41.602 million shares valued at N1.171 billion, while GTCO recorded 41.065 million shares worth N4.798 billion.
Fidelity Bank traded 29.173 million shares valued at N672.985 million, while Consolidated Hallmark Holdings recorded 28.503 million shares worth N202.322 million.
THE ISSUES
The market’s marginal decline came alongside a much broader imbalance between stocks that gained and those that lost value. The 41 decliners against 21 advancers suggest that investors were selling across more counters than they were buying.
The 48.2 per cent fall in trading volume also points to a reduction in the number of shares exchanged during the session. However, the figures alone do not establish whether investors are withdrawing from the market or simply becoming more cautious.
The contrast between the day’s decline and the 63.38 per cent year-to-date return shows that the market remains substantially higher than its level at the beginning of the year, despite the latest selling pressure.
WHAT’S NEXT
Cowry Assets Management Limited said sustained selling pressure and weak market breadth could limit the market’s near-term recovery.
The investment firm, however, noted that selective bargain-hunting could help cushion further losses as investors look for stocks trading at more attractive prices.
BOTTOM LINE
The NGX began November with a marginal decline, but the wider picture showed more stocks losing value than gaining. Whether the market recovers will depend partly on whether buying interest returns to heavyweight stocks and whether the current selling pressure eases.
