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By Chukwuma Umeorah
The Nigerian equities market ended the week on a bearish note as investors’ risk-off sentiment weighed on trading activity, pulling the All-Share Index (ASI) down by 0.94 per cent to close at 138,980.01 points. Consequently, market capitalisation declined by N832 billion to settle at N87.94 trillion, trimming year-to-date return to 35.03 per cent.
Data from the Nigerian Exchange (NGX) showed that the market traded for four sessions following the Eid el Maulud holiday on Friday. A total turnover of 3.12 billion shares valued at N90.30 billion was exchanged in 118,018 deals, lower than 3.20 billion shares worth N85.40 billion in 142,477 deals recorded the previous week. The Financial Services sector dominated activity with 2.54 billion shares worth N30.36 billion traded in 52,390 deals, representing 81.55 per cent and 33.62 per cent of total volume and value respectively.
Sovereign Trust Insurance, Access Holdings and Fidelity Bank emerged as the most active stocks, accounting for 1.69 billion shares worth N9.81 billion in 9,367 deals, contributing 54.05 per cent of total volume. Sectoral performance was largely negative, with five out of six major indices closing in the red. The Industrial Goods Index posted the heaviest loss at 2.08 per cent, driven by selloffs in Lafarge Africa and other mid-to-large cap stocks.
The Banking Index followed with a 1.52 per cent drop amid cautious positioning in financial counters. Consumer Goods, Oil & Gas and Insurance indices shed 1.18 per cent, 0.77 per cent and 0.36 per cent respectively. The only exception was the NGX Commodity Index which inched up 0.04 per cent, while the NGX Growth Index rose 0.15 per cent.
Overall market breadth remained weak as 19 stocks advanced while 64 declined, compared to 32 gainers and 57 losers in the previous week.
Sovereign Trust Insurance gained 14.23 per cent to close at N2.97, followed by Secure Electronic Technology with a 12.94 per cent rise, and Cornerstone Insurance which appreciated by 12.36 per cent. Other notable gainers included NCR Nigeria (+9.96 per cent), SCOA Nigeria (+9.83 per cent), Guinea Insurance (+9.15 per cent) and Transnational Corporation (+5.74 per cent).
On the losers’ chart, Daar Communications fell by 21.1 per cent to N0.86 per share, topping the week’s decliners. UPDC Plc and AIICO Insurance shed 13.85 per cent and 13.61 per cent respectively, while Champion Breweries, PZ Cussons and Lafarge Africa all dipped by over 13 per cent. Eterna Plc, Learn Africa, University Press and Omatek Ventures also recorded significant losses during the week.
Market analysts at Cowry Asset Management attributed the bearish trend to lingering macroeconomic headwinds which continue to dampen investor appetite for risk assets. “In the coming week, we expect the Nigerian equities market to trade cautiously, with sentiment likely to remain weak amid persistent macroeconomic headwinds such as currency pressures, inflation expectation, and uncertainty around monetary policy direction,” Cowry noted in its weekly outlook.
Regulatory actions also featured during the week as the NGX announced the suspension of three listed companies, Regency Alliance Insurance, International Energy Insurance, and Universal Insurance over their failure to file 2024 audited financial statements in line with listing requirements.
However, Universal Insurance later filed its outstanding accounts, leading to a lifting of its suspension on September 3 .
Despite the downturn, analysts advised investors to take positions in fundamentally strong stocks, pointing to value opportunities in oversold counters. Cowry added that “While bargain-hunting in oversold stocks could trigger mild recoveries in select counters, overall market performance is expected to stay broadly bearish, with investor appetite for risk assets still subdued.”
