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Investors in the Nigerian stock market lost N534 billion last week as falling share prices of major banks, including Zenith Bank Plc and Guaranty Trust Holding Company Plc (GTCO), dragged the market lower.
The NGX Banking Index, which tracks the performance of listed banks, fell by 3.15 per cent, making it the worst-performing major sectoral index during the week.
The decline pulled the Nigerian Exchange Limited (NGX) All-Share Index, the market’s main performance measure, down by 0.33 per cent, from 248,363.55 points at the beginning of the week to 247,539.73 points on Friday, October 16.
The market’s total value also fell to N160.725 trillion, while its year-to-date return dropped to 59.07 per cent.
Zenith Bank recorded one of the biggest losses among major banking stocks, shedding 6.46 per cent to close at N126 per share. GTCO fell by 5.10 per cent to N124.80 per share, while First HoldCo Plc also contributed to the sector’s poor performance.
The losses showed that pressure on leading banking stocks was strong enough to pull the wider market lower, despite gains recorded in some other sectors.
However, the decline was not across the board, as oil and gas stocks recorded gains that helped limit the market’s losses. The NGX Oil and Gas Index rose by 3.13 per cent, supported by advances in Aradel Holdings Plc and Eterna Plc, which offset losses in Oando Plc.
The Consumer Goods Index also edged up by 0.09 per cent, while the Industrial Goods Index recorded a marginal 0.004 per cent gain. The mixed performance showed that while investors sold shares in major banks, buying interest in selected oil and gas and consumer goods stocks helped cushion the overall market decline.
Despite the bearish close, market breadth remained positive, with advancing stocks outnumbering decliners. Cowry Asset Management Limited reported 49 gainers against 29 decliners, indicating that “price increases across a number of equities were insufficient to offset the impact of losses in selected stocks with significant market influence.”
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The market’s year-to-date performance also remained positive, with the ASI returning 59.07 per cent as of October 16. The Oil and Gas Index recorded a stronger year-to-date gain of 131.96 per cent, making it one of the market’s leading sectoral performers.
Trading activity weakened during the week, with investors exchanging 1.659 billion shares valued at N98.088 billion in 184,632 deals. This compared with 2.715 billion shares worth N158.280 billion in 209,986 deals recorded in the preceding week, reflecting declines in volume, value and the number of transactions.
The Financial Services sector accounted for the largest share of trading activity, with 1.083 billion shares valued at N48.967 billion exchanged in 86,994 deals. The sector represented 65.31 per cent of total traded volume and 49.92 per cent of total traded value, underlining its importance to activity on the exchange.
Access Holdings Plc, United Bank for Africa Plc and Livestock Feeds Plc were the most actively traded stocks by volume, recording a combined 413.964 million shares valued at N12.158 billion in 18,365 deals.
On the gainers’ table, Livestock Feeds Plc gained 44.49 per cent, closing at N19 per share. E-Tranzact International Plc rose by 42.98 per cent to N17.30 per share, while Multi-Trex Integrated Foods Plc gained 42.86 per cent to close at N0.60 per share. Other notable gainers included Austin Laz and Company Plc, which advanced by 32.7 per cent to N2.92 per share, and Omatek Ventures Plc, which rose by 19.4 per cent to N1.60 per share.
On the losers’ table, UPDC Real Estate Investment Trust declined by 11.88 per cent to close at N21.15 per share, followed by Nigerian Enamelware Plc, which lost 9.95 per cent to N36.65 per share. NASCON Allied Industries Plc fell by 9.48 per cent to N171 per share.
The week’s performance showed that although a larger number of stocks recorded gains, losses in major banking equities and other selected counters weighed on the benchmark index, leaving the market with a marginal weekly decline.
Cowry in its weekly review note projects that in the coming week, the Nigerian equities market is expected to remain cautious amid prevailing selling pressure and subdued trading activity. “However, bargain-hunting in fundamentally sound stocks and sustained interest in the Oil and Gas and Commodity sectors could provide support for market performance.
Overall, market direction is likely to depend on investor sentiment, sectoral performance, and reactions to corporate earnings and macroeconomic developments.”
