Persistent profit-taking and portfolio rebalancing erased about N1.8 trillion from the Nigerian Exchange (NGX), extending a market correction that has already wiped nearly N12 trillion off the value of the Exchange’s largest listed companies in June, as investors shifted towards fixed-income assets and locked in gains from the market’s strong rally earlier this year.
The selloff underscores a growing change in investor sentiment after months of exceptional gains that propelled the benchmark NGX All-Share Index (ASI) to record highs. While equities remain one of Africa’s best-performing asset classes this year, analysts say attractive Treasury yields and mounting uncertainty ahead of the earnings season are encouraging investors to rotate out of expensive large-cap stocks.
The benchmark NGX All-Share Index declined 1.21 percent week-on-week to close at 229,240.34 points, reducing the market’s year-to-date return to 47.31 percent. Market capitalisation fell from about N148.9 trillion to N147.10 trillion, reflecting broad-based weakness across virtually every major sector of the market.
The correction follows an even sharper adjustment in June, when the combined market capitalisation of Nigeria’s largest listed companies, classified as Stocks Worth Over One Trillion Naira (SWOOT), declined by N11.97 trillion, representing an 8.21 percent monthly loss.
Market analysts say the twin declines reflect a healthy, albeit painful, repricing after months of extraordinary appreciation in blue-chip stocks.
Investor appetite remained subdued throughout the week despite stronger trading activity.
Market breadth weakened significantly, with 57 stocks declining against only 21 gainers, highlighting the widespread nature of the selloff across sectors.
Trading volume rose 64.38 percent, while transaction value was up 14.80 percent to N154.58 billion, with 3.82 billion shares exchanged in 258,883 deals.
The increase in activity indicates that institutional investors continued rotating portfolios ahead of second-quarter earnings releases while taking advantage of elevated valuations in several counters.
The Industrial Goods Index recorded the heaviest weekly decline, falling 4.93 percent for a second consecutive week as investors sold down Dangote Cement, Lafarge Africa and Meyer after their strong year-to-date rally.
Consumer Goods followed closely with a 4.56 percent decline, driven by losses in McNichols, Honeywell Flour Mills, Unilever Nigeria and NASCON Allied Industries, amid persistent concerns over weak consumer purchasing power and rising operating costs.
The Oil and Gas Index lost 4.34 percent, reflecting weakness in Aradel Holdings, although gains in Oando and Japaul Gold helped moderate sector-wide losses.
Banking stocks also came under sustained pressure, with the Banking Index declining 3.72 percent as investors booked profits in Zenith Bank, GTCO, Fidelity Bank and Jaiz Bank ahead of the reporting season.
The Insurance Index retreated 2.52 percent, completing a week in which every major sector finished in negative territory.
June correction wipes N12trn from market leaders
The broader market weakness mirrors the valuation losses recorded by Nigeria’s largest listed companies during June.
Data from the Nigerian Exchange show that the combined market capitalisation of the 25 SWOOT companies fell from N145.74 trillion in May to N133.78 trillion in June, wiping out N11.97 trillion in shareholder value within one month.
The correction affected virtually every major sector, with telecoms, cement manufacturers, banks, consumer goods companies and energy firms recording significant valuation losses.
Dangote Cement posted one of the largest declines, losing N3.66 trillion in market value after investors locked in gains following months of sustained appreciation.
BUA Cement shed N2.70 trillion, while Aradel Holdings lost N2.24 trillion, representing the steepest percentage decline among the large-cap stocks reviewed.
MTN Nigeria also came under pressure, with its market capitalisation falling by N2.10 trillion, reflecting a combination of profit-taking and investor concerns over persistent currency volatility and rising operating costs.
Banking stocks were not spared.
Zenith Bank lost N870 billion, GTCO declined by N440 billion, United Bank for Africa shed N270 billion, while Wema Bank recorded one of the sector’s sharpest percentage declines after losing N300 billion in market value.
Among industrial and consumer stocks, Lafarge Africa, BUA Foods, Nigerian Breweries, International Breweries and Geregu Power all recorded sizeable valuation declines as investors reduced exposure to previously high-flying counters.
One notable exception to the market-wide correction was Airtel Africa, which added N4.28 trillion in market value during June, making it the only major heavyweight stock to record a substantial appreciation.
Meanwhile, Nestlé Nigeria, Presco, Transcorp Hotels and Transcorp Power remained broadly stable during the month.
On a weekly basis, Airtel Africa again emerged among the best-performing stocks after gaining 21 percent, followed by Regal Insurance, UPDC, Dangote Cement and SUNU Assurances.
At the opposite end of the market, International Energy Insurance, McNichols, UPL, RT Briscoe and UPDC REIT recorded the steepest declines.
Fixed-income market drawing investors
Analysts attribute much of the market’s recent weakness to the increasingly attractive returns available in Nigeria’s fixed-income market.
With interest rates remaining elevated, Treasury bills and government securities continue to offer competitive risk-adjusted returns, prompting institutional investors to rebalance portfolios away from equities.
The shift has been particularly pronounced among large-cap stocks that generated exceptional returns during the first half of the year.
Market participants also cite foreign exchange uncertainty, cautious positioning ahead of corporate earnings releases and macroeconomic concerns as factors weighing on investor sentiment.
Despite the recent correction, analysts do not interpret the selloff as evidence of deteriorating corporate fundamentals.
Instead, they describe it as a market reset following one of the strongest rallies in recent years.
The combined market capitalisation of SWOOT companies, despite June’s losses, remains substantially above the N86.43 trillion recorded at the end of December 2025, underlining the significant wealth creation achieved over the past six months.
Looking ahead, investors are expected to remain cautious as attention shifts to second-quarter corporate earnings, monetary policy developments and macroeconomic indicators.
Analysts expect profit-taking to persist, particularly among recently appreciated large-cap stocks, although strong earnings surprises could help restore buying interest in fundamentally attractive companies.
