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The Nigerian equities market lost about N1.96 trillion in market capitalisation last week as investors sold off equities and repositioned their portfolios ahead of the Dangote Refinery Initial Public Offering (IPO). The NGX All-Share Index (ASI) declined by 1.60 per cent from 246,992.44 points at the end of the previous week to 243,052.74 points, while market capitalisation fell from its previous level to N157.587 trillion.
The decline moderated the equities market’s year-to-date return to 56.19 per cent, according to the weekly market report of the Nigerian Exchange (NGX). The sell-off was reflected in the breadth of the market, with only nine equities recording price gains during the week, compared with 56 in the previous week. In contrast, 80 equities depreciated, up from 35 the previous week, while 58 remained unchanged.
Cowry Asset Management attributed the negative performance to renewed sell-off interest and profit-taking as investors prepared for the Dangote Refinery IPO.
“The market’s negative performance was largely driven by weak investor sentiment and increased profit-taking ahead of the anticipated Dangote Refinery IPO, as investors appeared to reposition their portfolios in preparation for the offering,” the firm said.
The sell pressure was particularly visible in banking and insurance stocks, with the NGX Insurance Index falling 5.52 per cent and the NGX Banking Index declining 4.07 per cent. The Industrial Goods Index also fell by 3.36 per cent, while the Consumer Goods Index declined by 2.55 per cent.
The banking sector’s decline was driven by sell-offs in First HoldCo Plc, FCMB Group Plc, Fidelity Bank Plc and Access Holdings Plc, while losses in the insurance sector were led by Fortis Global Insurance Plc, Sunu Assurances Nigeria Plc, International Energy Insurance Plc and Guinea Insurance Plc.
The decline, however, was not across all sectors. The NGX Oil/Gas Index gained 2.83 per cent, supported mainly by Seplat Energy Plc, while the NGX Commodity Index rose 2.19 per cent. Trading activity also weakened in value terms as investors adjusted their positions. NGX recorded 3.647 billion shares valued at N130.151 billion in 244,777 deals, compared with 4.360 billion shares worth N210.331 billion in 223,284 deals in the preceding week.
This represented a 16.36 per cent decline in traded volume and a 38.15 per cent drop in transaction value, even as the number of deals increased by about 9.61 per cent. Financial Services remained the most active industry, accounting for 2.909 billion shares worth N56.668 billion in 106,662 deals. It contributed 79.76 per cent of total equity turnover volume and 43.54 per cent of turnover value.
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Fortis Global Insurance Plc, Mutual Benefits Assurance Plc and Sterling Financial Holdings Company Plc accounted for 1.544 billion shares worth N4.067 billion, representing 42.33 per cent of total equity turnover volume.
The broad sell-off also produced sharp declines among several individual stocks. Fortis Global Insurance Plc recorded the biggest weekly decline, falling 27.50 per cent from N2 to N1.45 per share. Critical Minerals Financing Corp Plc lost 24.24 per cent, closing at N2 per share, while Austin Laz & Company Plc fell 20.40 per cent to N1.99. Omatek Ventures Plc declined 19.41 per cent to N1.37, while Royal Exchange Plc and R. T. Briscoe (Nigeria) Plc each fell 18.18 per cent.
The gainers’ side was much thinner, with Nigerian Exchange Group Plc recording the strongest appreciation. It gained 13.85 per cent, closing at N148 per share. Ellah Lakes Plc gained 13.33 per cent to N10.20, followed by Seplat Energy Plc, which rose 10 per cent to N14,907.80 per share.
E-Tranzact International Plc gained 5.69 per cent to N13, while Ikeja Hotel Plc rose 4.58 per cent to N44.50.
Cowry forecasts continued caution and volatility in the equities market in the near term. “We expect the Nigerian equities market to remain volatile and cautious in the near term as investors reposition ahead of the Dangote Refinery IPO,” Cowry said.
The firm added that continued profit-taking and liquidity rotation could put further pressure on the market, while the market’s direction would depend on investors’ response to the IPO, liquidity conditions and portfolio rebalancing.
Meanwhile, the week also saw the listing of additional shares of Dangote Sugar Refinery Plc following its rights issue. NGX listed 8.097 billion additional Dangote Sugar Refinery Plc shares on September 7 at N60 per share. The shares were issued through a rights issue on the basis of two new ordinary shares for every three existing shares held by qualifying shareholders.
Following the listing, Dangote Sugar Refinery Plc’s issued and fully paid-up share capital increased from 12.146 billion shares to 20.245 billion shares. The additional listing was one of the factors that influenced the movement in market capitalisation during the week, alongside the broader market sell-off.
