The stock market experienced significant downturns over the past week, leading to consecutive daily losses for investors. By the end of the trading week, approximately N1.22 trillion was lost from investor wealth, primarily attributed to sell-offs as investors engaged in portfolio balancing tactics. Notable companies such as Aradel and BUA Cement saw sharp declines in their stock prices—25.75% and 11.09% respectively—prompting concerns among investors. Analysts from Cowry Assets Management Limited highlighted that a cautious trading approach was prevalent as investors navigated economic uncertainties, exacerbated by recent macroeconomic data releases, particularly those related to internally generated revenue across Nigeria’s states and Federal Capital Territory for 2023.
The All-Share Index concluded the week with a 2.03% reduction, finishing at 97,432.02 points, reflecting a market capitalization decrease of 2.03% to settle at N59.04 trillion. This marked a significant erosion of gains from the preceding weeks as investor sentiment waned. In terms of trading activity, the volume was robust but down from the previous week, with a total turnover of 2.717 billion shares worth N54.632 billion exchanged across nearly 47,000 transactions, compared to the 2.142 billion shares worth N85.946 billion traded the prior week. Notably, the Financial Services Industry dominated the volume traded, comprising over two-thirds of total equity turnover, followed by ICT and Conglomerates.
Throughout the week, the overall stock performance was characterized by widespread losses across various sectors. The NGX-Industrial Goods sector was notably affected, declining by 3.70% due to substantial losses witnessed in companies like BUA Cement and Caverton Offshore Support. Similarly, the Consumer Goods and Insurance sectors recorded slight declines of 0.22% and 0.40% respectively, driven by reduced trading activity and price drops across stocks like Cadbury and Regency Alliance Insurance. In stark contrast, the NGX-Oil & Gas sector emerged as the sole gainer, posting a 1.15% increase thanks to positive sentiments for Conoil and Eterna, while the Banking index also recorded modest gains, uplifted by solid performances from Guaranty Trust Holding Company and Zenith Bank.
By the end of the trading session, the number of stocks that appreciated decreased significantly, with only 39 equities recording gains compared to 58 the previous week. In contrast, 45 stocks experienced depreciation, sharply up from just 18 the week prior, while the number of equities that remained unchanged fell to 68 from 76. Among the top advancers was Transnational Corporation Plc, which surged by an impressive 314.03% after a reconstruction of its issuer capital led to new share listings. Other gainers included Eunisell Interlinked Plc and John Holt, each showing robust growth and contributing positively to market sentiment.
On the other hand, leading the decliners was Aradel, experiencing a substantial drop of 25.75% in its share price, while notable declines also occurred in Caverton Offshore Support and Regency Assurance Plc. These declines reflect a broader trend of apprehension among investors, who seem to be adopting risk-off strategies given the current economic landscape. The recent fluctuations in liquidity and persistent inflationary pressures have further discouraged investor enthusiasm, with many awaiting clearer signals on monetary policy and associated fiscal measures before making new investments.
Experts believe that the recent decline in the benchmark index reflects a sustained caution among investors, which is likely to persist as the market absorbs fluctuating economic indicators and uncertain corporate earnings forecasts. Consequently, the market is anticipated to remain volatile in the short term. However, potential positive developments, such as stabilization of macroeconomic conditions or improved corporate earnings, could foster renewed investor confidence and pave the way for recovery in the stock market. Analysts recommend monitoring these indicators closely as they could significantly influence future trading activity and market sentiment in the coming weeks.
