Onome Amuge
The Nigerian equities market recorded another week of losses, extending its bearish run as investor sentiment remained firmly risk-averse in the face of macroeconomic uncertainties. The benchmark NGX All-Share Index (ASI) fell 0.50 per cent week-on-week to close at 140,295.49 points, down from 141,004.14 points the previous week. Market capitalisation correspondingly declined by N439 billion to N88.77 trillion, trimming the year-to-date return to 36.31 per cent.
The latest setback showcases the market’s struggle to sustain momentum in the absence of strong catalysts. Market breadth was notably weak at 0.54x, with 31 gainers against 57 decliners.
Losses were broad-based across all six sectoral indices tracked by the exchange. The Banking Index led the decline with a 1.21 per cent fall, dragged lower by persistent sell pressure on mid- and large-cap counters. The Insurance Index was close behind, shedding 1.02 per cent on the back of declines in smaller insurers. Consumer Goods dropped 0.89 per cent, while Industrial Goods and Commodities lost 0.36 per cent and 0.30 per cent respectively. Oil and Gas registered a milder 0.18 per cent decline, but the negative close reinforced the general downbeat tone.
The selloff in financials was particularly notable. Analysts attributed the weakness in equities to tight system liquidity and continued uncertainty around the interest rate and monetary policy outlook.
Trading activity remained muted throughout the week. The total number of deals slipped 6.54 per cent to 142,654, while turnover was sharply lower. Volumes contracted by 41.03 per cent to 3.20 billion units, and value traded declined 21.21 per cent to N85.47 billion.
The heaviest losses were concentrated in a handful of counters that dominated the week’s losers’ chart. NSLTECH led the declines with a 22.7 per cent fall, reflecting heavy sell pressure amid thin liquidity. Guinea Insurance slumped 19.8 per cent, while Lasaco Assurance lost 13.3 per cent.
United Property Development Company (UPL) also fell sharply, dropping 12.1 per cent, while Mutual Benefits Assurance shed 11.9 per cent. The weakness among insurers was a key factor dragging down the Insurance Index, underscoring investor concerns about profitability and balance-sheet resilience in a high-inflation environment.
Despite the broader malaise, a few stocks bucked the trend. MCNICHOLS posted an 18.8 per cent weekly gain, while NEM Insurance climbed 17.3 per cent. Paints and coatings manufacturer Berger advanced 15.3 per cent, Wapic Insurance rose 12.8 per cent, and LearnAfrica added 11.4 per cent.
Market participants said the gains were largely technical, driven by bargain-hunting in oversold counters. However, these isolated advances were insufficient to offset the overall breadth of declines.
Looking ahead, analysts expect the equities market to remain under pressure in the near term. Cowry Research, in a note, forecast that trading would be mixed but skewed to the downside amid weak liquidity conditions and lingering macroeconomic headwinds.
“Sell pressure in the Banking and Industrial Goods sectors may persist, while bargain-hunting in oversold counters, particularly within Consumer Goods and Insurance, could drive mild recoveries. Overall, the market is expected to trade range-bound with a slight bearish bias, barring any major policy pronouncements or corporate catalysts,” it stated.
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