Heavyweight stocks dragged the benchmark lower last week despite a broader advance in the number of gainers, as investors reduced trading activity and locked in profits after the market’s strong year-to-date rally.
The NGX All-Share Index (ASI) fell 0.52 percent week-on-week to 250,808.27 points, reducing the market’s year-to-date return to 61.17 percent, while total market capitalisation slipped to N162.84 trillion.
The decline, however, masked a less uniformly weak market, with 44 stocks closing higher against 37 decliners, producing a positive breadth ratio of 1.19x.
It also points to a market entering a more selective phase after its strong year-to-date rally, with investors rotating between stocks and locking in gains in some counters while continuing to accumulate others.
Despite the positive breadth, losses in major stocks exerted sufficient downward pressure to pull the ASI into negative territory.
The Banking sector was the biggest drag, declining 1.33 percent during the week, while Consumer Goods and Industrial Goods fell 0.91 percent and 0.26 percent, respectively.
The Oil/Gas sector edged up 0.05 percent, while Insurance emerged as the strongest-performing sector, gaining 0.61 percent. The Commodity sector was unchanged.
ABCTRANS led the gainers with a 45.1 percent appreciation, followed by CMFC at 37.7 percent. LIVINGTRUST, VFDGROUP and CWG rose 32.7 percent, 18.4 percent and 15.3 percent, respectively.
At the opposite end, SOVRENINS fell 12.5 percent to lead the decliners. ETRANZACT dropped 12 percent, while LEARNAFRICA, PZ and FTGINSURE declined 11 percent, 10 percent and 9.5 percent, respectively.
The wide price movements reinforce the increasingly stock-specific character of the market, as investors reassess valuations and rotate capital following substantial gains recorded earlier in the year.
Trading activity also weakened sharply, pointing to a more cautious investor stance.
The number of deals fell 20.90 percent week-on-week, while trading volume and transaction value declined 32.48 percent and 35.63 percent, respectively.
Investors exchanged 3.17 billion shares valued at N155.11 billion in 206,974 deals during the week.
For a market that has delivered a 61.17 percent return so far this year, the pullback is consistent with a period of profit-taking as investors reassess positions and valuations.
Analysts at Cowry Asset Management said the market could remain cautious and volatile in the near term as investors continue to lock in profits following the strong year-to-date rally.
However, the positive market breadth shows that underlying demand has not disappeared, creating room for selective bargain-hunting in stocks that have lagged the broader market.
“This could result in continued sector and stock rotation as investors balance profit-taking against opportunities emerging from recent price corrections,” the analysts said.
They expect investors to place greater emphasis on stocks with attractive valuations, resilient earnings, sustainable dividend capacity and credible growth prospects.
Market direction in the coming weeks is expected to hinge on corporate earnings, macroeconomic conditions, system liquidity and interest-rate expectations, alongside changes in investor sentiment.
The combination of a still-strong cumulative market return and declining weekly activity suggests that the NGX may be moving from a broad-based rally into a more discriminating phase, where earnings quality, valuation and dividend prospects increasingly determine where fresh capital is deployed.
