The Nigerian stock market closed on a bearish note last weekend, reflecting broader economic challenges, including an energy crisis that saw petrol prices surge significantly. Prices at the pump climbed to between N855 and N1,000 per litre from approximately N600 per litre, drawing condemnation from the private sector over the potential adverse impact on business operations.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI), a key performance indicator, fell by 0.2% to close at 96,433.53 points, down from 96,579.54 points the previous week. Similarly, market capitalization declined by over N83 billion, ending the week at N55.394 trillion, compared to N55.477 trillion.
Profit-taking activities significantly impacted major stocks, contributing to the market decline. Dangote Sugar saw its share price drop by 5.5%, Zenith Bank by 2.0%, and WAPCO by 3.5%, among others. This downturn contributed to the decrease in the ASI.
A sectoral review revealed mixed performances:
- Insurance Index: Declined by 4.5%
- Consumer Goods Index: Decreased by 1.2%
- Industrial Goods Index: Fell by 0.2%
- Banking Index: Dropped by 0.1%
- Oil and Gas Index: Rose by 1.5%
Year-to-Date (YtD) returns moderated to +29.0%, reflecting subdued market activity. Total trading volume and value fell by 23.7% Week on Week (W/W) and 3.3% W/W, respectively.
Cordros Research analysts project a mix of cautious trading and selective buying in the coming week. They anticipate market participants will be vigilant for any signs of broader market interest while acknowledging the likelihood of profit-taking on stocks that have appreciated significantly in recent weeks.
InvestData Consulting analysts expect mixed sentiment, with potential bargain hunting on pullbacks and interest in interim dividend-paying bank stocks in anticipation of their half-year results. They foresee sector rotation continuing and suggest that investors take advantage of price corrections. They also highlight the impact of both domestic and global trends on market performance.
The Nigerian stock market’s recent performance underscores the ongoing economic challenges, including the impact of rising energy costs. Investors and analysts remain cautious, with expectations for mixed trading sentiment and selective buying strategies in the weeks ahead. The market’s response to fiscal and monetary policies, alongside global and domestic events, will continue to shape its trajectory.
