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The Nigerian stock market suffered one of its sharpest weekly declines in recent months as investors dumped equities amid profit-taking activities, preparations for the anticipated Dangote Refinery Initial Public Offering (IPO), and growing capital pressures facing market operators.
Data from the Nigerian Exchange Limited (NGX) showed that the benchmark All-Share Index (ASI) fell by 3.59 per cent over five consecutive trading sessions to close at 235,941.27 points on Friday, while market capitalisation declined by N5.643 trillion to N151.327 trillion. The broad-based selloff left market breadth firmly negative, with 78 decliners against only 11 gainers, reflecting widespread bearish sentiment across sectors and market capitalisation tiers.
Analysts said the decline was driven by a combination of seasonal market dynamics, portfolio rebalancing by investors seeking liquidity ahead of the expected Dangote Refinery share offer, and efforts by some operators to preserve capital amid changing regulatory and political conditions.
Managing Director and Chief Executive Officer of Globalview Capital Limited, Aruna Kebira, said the market’s current weakness reflects a pattern often observed after the dividend season when investors reassess positions and wait for the next round of corporate earnings.
“Typically, by June, market activity begins to moderate after the rush associated with year-end financial results and dividend declarations. Most quoted companies release their audited results between February and April, and dividends are subsequently paid and marked down. Once that cycle is completed, investors often become more cautious while awaiting second-quarter earnings, creating a period of uncertainty that can exert downward pressure on stock prices,” Kebira said.
According to him, the market is currently in a transition phase as investors await half-year earnings expected from the end of July. “There is a gap between the completion of dividend-related activities and the release of second-quarter numbers. During that period, investors tend to become selective, while some prefer to lock in profits. That behaviour is contributing to the current market correction,” he added.
Kebira also pointed to growing investor interest in the proposed Dangote Refinery public offer as a major factor influencing trading decisions. “Another important development is that many investors are liquidating parts of their portfolios in anticipation of the Dangote Refinery public offering. Given the scale and visibility of the company, many market participants want to create liquidity ahead of the offer, and that has contributed to the selling pressure being witnessed across several stocks.”
The anticipated listing of Dangote Refinery has generated significant interest within the investment community, with analysts expecting it to become one of the largest listings on the Nigerian Exchange when eventually offered to the public.
Beyond the IPO factor, market operators also linked the selloff to efforts by some institutions to strengthen liquidity positions amid evolving capital requirements and heightened political uncertainty. Vice Chairman of Highcap Securities Limited, David Adonri, described the market decline as largely a correction process following the strong gains recorded after the release of corporate earnings.
“This is a seasonal trend that usually aligns stock valuations more closely with their underlying fundamentals after the end-of-year corporate disclosure season. Following the strong rally that accompanied impressive earnings releases and dividend announcements, some level of correction was expected as investors reassess valuations and take profits,” Adonri said.
He added that investor preparations for the Dangote Refinery IPO may have amplified the trend.”There is also the possibility that investors liquidated some assets proactively to position for the Dangote Refinery IPO. Such a large offering is expected to attract substantial investor attention and capital, prompting portfolio adjustments well ahead of the offer.
“Market operators may also have been reducing exposure in order to forestall any erosion of capital arising from heightened political risk. Preserving capital buffers is becoming increasingly important, particularly for institutions seeking to comply with evolving minimum capital requirements.”
Analysts at Imperial Asset Managers Limited said investor attention will increasingly shift to macroeconomic indicators and corporate earnings performance in the coming weeks. “Looking ahead, market participants will be guided by the commencement of half-year 2026 earnings releases and accompanying dividend signals, the direction of crude oil prices and their implications for foreign exchange stability, as well as liquidity management measures by the Central Bank of Nigeria.
“A selective investment approach remains appropriate under current conditions. Investors should focus on fundamentally sound companies with sustainable earnings and dividend-paying capacity. The broad-based selloff in quality banking stocks may present attractive value opportunities for long-term investors, although disciplined portfolio management remains essential given prevailing liquidity conditions.”
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Similarly, analysts at Futureview Financial Services Limited said investors are likely to maintain a cautious approach until stronger market catalysts emerge. “We expect investors to trade cautiously, focusing on fundamentally strong stocks with attractive valuations while relying on verified market data, earnings releases and other material information to guide investment decisions.”
Meanwhile, trading statistics for the week underscored the extent of the bearish sentiment as investors adopted a risk-off stance across major sectors of the market.
Data from the Nigerian Exchange showed that a total turnover of 3.075 billion shares worth N254.614 billion was traded in 287,157 deals during the week, compared to 4.964 billion shares valued at N207.521 billion exchanged in 235,966 deals in the preceding week. While trading volume declined by about 38 per cent, transaction value rose significantly, suggesting that investors were actively repositioning in higher-priced stocks and large-cap counters.
The Financial Services sector remained the most active segment of the market, accounting for 2.074 billion shares valued at N64.49 billion in 121,981 deals. The sector contributed 67.44 per cent and 25.33 per cent to total equity turnover volume and value respectively. The Services sector followed with 175.74 million shares worth N2.759 billion, while the Consumer Goods sector recorded 133.38 million shares valued at N12.68 billion.
Activity was largely driven by Access Holdings Plc, Sterling Financial Holdings Company Plc and Jaiz Bank Plc, which together accounted for 819.23 million shares worth N12.247 billion in 21,809 deals, representing 26.64 per cent of total traded volume and 4.81 per cent of total value for the week.
Sectoral performance was overwhelmingly negative, reflecting the broad-based nature of the selloff. The NGX Banking Index recorded the steepest decline, shedding 10.49 per cent week-on-week, followed by the Insurance Index which fell by 7.22 per cent. The Industrial Goods Index lost 4.11 per cent, while the Commodity Index declined by 2.22 per cent. Consumer Goods and Oil and Gas indices retreated by 1.61 per cent and 1.06 per cent respectively.
The sharp decline in banking counters was particularly significant as the sector had been among the strongest performers since the beginning of the year, buoyed by the ongoing banking recapitalisation exercise, strong earnings growth and robust dividend payouts. The NGX Banking Index has now lost 12.73 per cent month-to-date despite remaining up 35.77 per cent year-to-date.
At individual stock level, Cornerstone Insurance emerged as the week’s best performer, gaining 11.01 per cent to close at N6.05 per share. Academy Press followed with an 8.72 per cent appreciation to N8.10, while Conoil advanced by 8.25 per cent to N210.00 per share. Other notable gainers included Neimeth International Pharmaceuticals, Ikeja Hotel, Fortis Global Insurance, Royal Exchange, AXA Mansard Insurance, UACN and Champion Breweries.
On the losers’ chart, International Energy Insurance led the decline after shedding 28.83 per cent to close at N5.06 per share. First Holdco lost 20.29 per cent to close at N55.00, while John Holt fell 17.65 per cent to N11.20. Nigerian Aviation Handling Company (NAHCO) dropped 17.27 per cent, Zochis Agro-Allied Industries declined 16.13 per cent, while Guaranty Trust Holding Company shed 15.01 per cent during the week.
The widespread losses resulted in a significantly negative market breadth, with only 11 stocks advancing compared with 78 decliners, while 57 equities closed unchanged. The weak breadth reflected the depth of the correction and the dominance of sellers across virtually all sectors of the market.
Despite the selloff, the broader market remains firmly positive for the year, with the All-Share Index posting a year-to-date return of 51.62 per cent. However, analysts believe the current correction signals a more cautious phase for investors as attention shifts from dividend capture strategies to earnings sustainability, macroeconomic developments and preparations for major capital market transactions expected in the second half of the year.
Attention is now turning to half-year earnings reports, developments in the foreign exchange market, monetary policy decisions and the proposed Dangote Refinery IPO, all of which are expected to influence investor sentiment and determine whether the market resumes its upward trajectory or extends the current bearish phase.
For now, however, the market has entered a period of caution, with investors opting to preserve liquidity, lock in gains and reassess valuations after one of the steepest weekly declines recorded on the Exchange this year.
