A combination of cautious sentiment and profit-taking ahead of earnings releases triggered a mild pullback in the equities market last week, wiping about N157 billion off investor value.
Market capitalisation declined to N128.9 trillion from N129.1 trillion recorded in the previous week, reflecting a marginal contraction that underscores a pause in what has otherwise been a strong bullish run this year. Similarly, the benchmark All-Share Index (ASI) dipped by 0.12 percent week-on-week to close at 200,913.06 points, down from 201,156.86 points.
Despite the weekly loss, analysts maintain that the market’s fundamentals remain intact, with year-to-date returns still elevated at over 29 per cent, indicating the latest pullback is more of a correction than a reversal.
The week’s trading sessions were marked by sharp swings in investor sentiment, reflecting a market in transition.
The local bourse opened on a bearish note on Monday, March 23, wiping out N1.3 trillion in investor value by the close of trading. However, sentiment quickly reversed on Tuesday, March 24, as bullish activity returned, driving a remarkable N1 trillion gain within a single session.
Midweek trading again turned negative, with investors losing N477 billion on Wednesday, followed by a modest recovery of N21 billion on Thursday. The week ended on a softer note on Friday, March 27, with a further N29 billion loss.
The oscillating performance highlights a market facing uncertainty, as investors rebalance portfolios and lock in gains accumulated during the recent rally.
Market participation declined significantly compared to the previous week, signaling a wait-and-see approach among investors.
A total of 3.95 billion shares valued at N201.31 billion were traded in 359,642 deals, representing a sharp drop from the 8.76 billion shares worth N267.25 billion exchanged in the prior week. The steep decline in volume, down more than 56 per cent, points to reduced liquidity and subdued trading appetite.
The Financial Services Industry dominated trading activity, accounting for 72.94 per cent of total volume and 50.80 per cent of total value, with 2.88 billion shares worth N102.26 billion exchanged in 139,093 deals.
The ICT sector followed with 230.54 million shares valued at N45.17 billion, while the Agriculture sector recorded 191.93 million shares worth N6.63 billion.
At the stock level, trading was heavily concentrated in banking equities, with Wema Bank Plc, Access Holdings Plc, and United Bank for Africa Plc accounting for a combined 1.45 billion shares valued at N43.19 billion; over a third of total market volume.
Market breadth remained relatively balanced, with 47 gainers compared to 45 losers, indicating that while the major index weakened, opportunities persisted across select counters.
Top gainers included Zichis Agro Allied Industries Plc, which rose 60.72 per cent, followed closely by Premier Paints Plc and John Holt Plc, both posting gains of about 60 per cent.
On the downside, Livestock Feeds Plc led the losers’ chart with an 11.73 per cent decline, trailed by Fidson Healthcare Plc and Cadbury Nigeria Plc, which fell by nearly 10 per cent each.
Sectoral performance reflected ongoing portfolio rebalancing. The commodities index emerged as the top gainer, rising 2.77 per cent, supported by strong performances in key agro-linked stocks. Insurance and oil & gas indices also recorded gains of 2.22 per cent and 1.93 per cent respectively.
Conversely, the banking sector led the laggards due to declines in major tier-one and mid-tier banking stocks. Consumer goods and industrial indices also posted losses, weighed down by price declines in key bellwethers.
Market analysts attribute the recent softness to cautious sentiment, as investors adopt a defensive stance ahead of corporate earnings releases and macroeconomic signals expected in the new quarter.
According to analysts at Cowry Asset Management Limited, the market appears to be undergoing a short-term correction following an extended rally that pushed several stocks to 52-week and all-time highs.
They noted that a relatively low Money Flow Index (MFI) indicates weak capital inflows, suggesting that investors are holding back while awaiting fresh catalysts.
“This phase presents selective entry opportunities, and we continue to advise investors to focus on fundamentally sound stocks with strong earnings potential,” the firm stated.
