By Chukwuma Umeorah
Investors on the Nigerian Exchange Limited (NGX) saw a decline of N118.40 billion in their portfolios as the market’s All-Share Index (ASI) dropped by 0.20 per cent during the week ending November 8, 2024. The ASI closed at 97,236.19 points, pushing market capitalization down to N58.92 trillion, reflecting investor caution amid Nigeria’s persistent inflation and economic concerns.
The downturn was majorly impacted by selloffs in Oando Plc dragging its value by 21.97 per cent week-on-week. Nascon Allied Industries Plc, Eterna Plc and Japaul Gold also recorded 7.83 per cent, 9.82 per cent and 8.89 per cent respectively impacting the market’s weekly performance. The Year-to-date return moderated to 30.04 per cent. During the week under review, the broader market saw more decliners than gainers, with 42 stocks losing value compared to 31 gainers reflecting the broader sentiment of caution among investors in light of economic uncertainties.
Analysts noted that the decline comes as investors anticipate October’s inflation report, expected to show sustained inflationary pressures from rising food costs, supply chain disruptions, and currency depreciation. Cowry Asset Management projects that inflation could reach 33.10 per cent, putting additional strain on investor sentiment. Looking ahead to the coming week, they predict that mixed sentiment is expected to persist as portfolio rebalancing continues. “Despite the recent downturn, a near-term rebound is anticipated, although investor sentiment is expected to remain cautious. The release of October’s Consumer Price Index (CPI) figures by the National Bureau of Statistics could further weigh on market sentiment, with persistent inflationary pressures and potential currency volatility keeping investors on the edge.”
Despite the overall downturn, trading activities showed significant growth, with a total of 6.47 billion shares valued at N75.75 billion exchanged across 48,804 deals. This represents a substantial increase from the previous week’s 2.71 billion shares worth N54.63 billion in 46,848 transactions. The Financial Services sector dominated trading volumes with 5.66 billion shares valued at N44.26 billion traded in 23,268 deals. This accounted for 87.6 per cent of total turnover, driven by major equities such as Sovereign Trust Insurance Plc, Consolidated Hallmark Holdings Plc, and United Bank for Africa Plc. They accounted for 3.839 billion shares worth N20.905 billion in 5,652 deals, contributing 59.36 per cent and 27.60 per cent to the total equity turnover volume and value respectively.
Sectoral performances were mixed, with the Oil and Gas index recording a notable 5.43 per cent gain, largely attributed to Conoil Plc’s 37.35 per cent jump, closing at N260.00 per share. Similarly, the Banking index rose by 2.81 per cent, led by Access Holdings Plc, Ecobank Transnational Incorporated, and Sterling Financial Holdings. However, the Industrial Goods sector saw declines, with stocks like Abbey Mortgage Bank and Beta Glass dragging down overall performance.