… Despite N11.1trn July gain
By Peter Egwuatu
Nigeria’s stock market reversed course last week as widespread profit-taking erased N1.261 trillion from investors’ portfolios, ending the week in negative territory after a sustained rally.
The decline followed renewed selling pressure across major banking, industrial and consumer goods stocks as investors cashed in on the strong gains recorded in recent weeks.
Data from the Nigerian Exchange Limited (NGX) showed that market capitalisation fell by N1.261 trillion to close at N158.326 trillion, compared with N159.587 trillion in the preceding week.
Similarly, the benchmark NGX All-Share Index (ASI) declined by 0.83 per cent to 245,283.68 points from 247,357.40 points, reflecting the broad-based weakness across the market.
Despite the weekly setback, the market still posted a robust monthly performance, with investors gaining N11.109 trillion in July. Market capitalisation climbed from N147.217 trillion at the end of June to N158.326 trillion by the close of July, underlining the strength of the rally before last week’s correction.
The sharp monthly appreciation encouraged many investors to lock in profits, particularly in stocks that had recorded significant price gains.
Market breadth also deteriorated during the week, signalling a stronger bearish sentiment. Only 33 stocks advanced, down from 57 in the previous week, while 56 equities declined, compared with 38 losers a week earlier. A total of 58 stocks closed unchanged, up from 51 recorded previously.
Analysts at InvestData Consulting Limited attributed the downturn largely to profit-taking in highly capitalised and actively traded stocks, especially within the banking sector.
“The emergence of fresh 52-week lows amid the broader market decline suggests that some investors are becoming increasingly cautious about individual stocks, even as the overall NGX remains significantly higher on a year-to-date basis,” the firm said.
Looking ahead, the analysts expect cautious trading to persist in the near term.
“The NGX enters the new trading week with a cautious short-term outlook following last week’s broad-based selloff. Profit-taking is likely to remain a dominant feature of the market as investors continue to lock in gains from the strong rally recorded so far this year,” they added.