Onome Amuge
The Nigerian equities market witnessed a bearish week of trading, with investors losing N1.452 trillion on the Nigerian Exchange (NGX). The decline marks the first weekly loss of the year, contrasting with a gain of N1.137 trillion the previous week.
The value of the stock market, as measured by the market capitalisation, declined by 1.98 percent to N62.851 trillion from N64.303 trillion the previous week.
This market downturn was mirrored in the All-Share Index (ASI), which fell by 2.94 percent to close the week at 102,353.68 points, retreating from the previous week’s position of 105,451.06 points.
The NGX kicked off the week on a negative note, as investors lost a total of N51.10 billion on Monday, January 13, 2025.
The bearish trend continued into Tuesday, January 14, 2025, with the market shedding N1.06 trillion in value during the trading session.
The NGX’s downward spiral showed no signs of abating, as investors lost N930.62 billion on Wednesday, January 15, 2025.
After three days of losses, the Nigerian equities market staged a comeback on Thursday, January 16, 2025, with investors recouping N53.12 billion by the end of the trading session.
The positive momentum carried over into the final trading session of the week, with investors recording a gain of N541.09 billion on Friday, January 17, 2025.
Amid the market volatility, the NGX saw a total trading volume of 2.252 billion shares valued at N58.831 billion traded in 63,657 deals throughout the week.
Compared to the previous week, which witnessed a higher turnover of 4.698 billion shares worth N85.043 billion transacted in 72,562 deals, the trading volume and value witnessed a decline, pointing to an overall reduction in investor activity during the bearish week.
Price movement on the Nigerian Exchange saw a decline in price appreciations, with only 33 equities posting gains during the week, compared to 51 in the preceding week.
Conversely, the number of equities recording price depreciation rose sharply to 57, up from 39 in the previous week. Meanwhile, the number of equities maintaining their price levels remained unchanged at 62, same as the figure recorded in the previous week.
The Financial Services Industry emerged as the most active sector on the NGX during the week in review, with a trading volume of 1.371 billion shares valued at N22.274 billion. This represented a substantial portion of the total equity turnover volume and value, amounting to 60.86 percent and 37.86 percent, respectively
Following closely behind was the Consumer Goods Industry with a volume of 253.536 million shares and a total value of N15.244 billion traded across 8,869 deals.
The Services Industry also made its presence felt, contributing 193.424 million shares valued at N931.795 million in 4,716 deals, ranking third in terms of total equity turnover volume and value for the week.
Universal Insurance Plc, Guaranty Trust Holding Company Plc, and AIICO Insurance Plc emerged as the most actively traded stocks by volume for the week.
The trio accounted for a total of 468.315 million shares worth N9.007 billion in 3,568 deals, collectively contributing 20.79 percent to the total equity turnover volume and 15.31 percent to the total equity turnover value for the week.
The NGX witnessed a surge in the prices of Neimeth International Pharmaceuticals Plc, SCOA NIG. Plc, and NNFM Plc, with the three companies recording the highest share price appreciation during the week.
Leading the charge was Neimeth International Pharmaceuticals Plc, whose share price skyrocketed 31.42 percent, followed by SCOA NIG. Plc, which recorded a 20.39 percent increase in its share price, while NNFM Plc recorded a 19.54 percent appreciation in its share price.
Meanwhile, Universal Insurance Plc bore the brunt of the bearish sentiment, shedding 19.23 percent of its share price, closely followed by Royal Exchange Plc, which saw its share price tumble by 18.35 percent.
Regency Assurance Plc also took a hit, losing 17.78 percent of its share price in the volatile week of trading on the Nigerian Exchange.
In their commentary on the weekly equity market performance, analysts from Cowry Asset Management observed that the NGX is likely to experience a mixed performance in the coming week.
“While some degree of bargain hunting is expected as investors search for attractive entry points, much of the direction will be shaped by the anticipated earnings reports and the broader macroeconomic outlook,” they stated.
Despite the setbacks in the market during the week, Cowry Asset advised investors not to lose sight of potential buying opportunities arising from the pullbacks. The analysts pointed out that the current market conditions, characterised by profit-taking and sell-offs, may create attractive entry points for investors with a long-term horizon.
As the market anticipates the Q4 earnings season, Cowry Asset opined that discerning investors could capitalise on the undervalued stocks and market volatility
“The combination of mixed macroeconomic data and a series of anticipated economic events, such as the upcoming Monetary Policy Committee (MPC) meeting, is likely to continue influencing market dynamics. In this environment, it is crucial for investors to focus on stocks with strong fundamentals, as these are more likely to weather the current economic challenges and offer better longterm prospects,” Cowry Asset asserted.
