Stock Market Drops by N713bn in One Week on Investors Profit-taking

Kayode Tokede 

The Nigerian equities market snapped its weekly winning streak, closing lower by N713 billion week-on-week for the first time in 12 weeks amid profit-taking by investors.

Specifically, the benchmark Nigerian Exchange Limited All-Share Index (NGX ASI) depreciated by 0.77 per cent week-on-week to close at 144,628.20 points. Also, the market capitalisation dropped by N713 billion to close the week at N91.502 trillion.

Sector performance was largely negative, as the Oil & Gas (-1.4per cent), Consumer Goods (-0.9per cent), Industrial Goods (-0.8per cent), and Banking (-0.2per cent) all closed lower, leaving the NGX Insurance index (+8.2per cent) as the sole gainer.

The market breadth for the week was positive as 50 equities appreciated in price, 49 equities depreciated in price, while 47 equities remained unchanged.

Mutual Benefits Assurance led the gainers table by 31.85 per cent to close at N3.85, per share. Tripple Gee and Company followed with a gain of 30.23 per cent to close at N5.60, while SUNU Assurance went up by 23.80 per cent to close to N6.19, per share.

On the other side, UPDC led the decliners table by 17.72 per cent to close at N6.50, per share. LivingTrust Mortgage Bank followed with a loss of 16 per cent to close at N4.20, while Berger Paints declined by 14.67 per cent to close at N32.00, per share.

Overall, a total turnover of 8.564 billion shares worth N99.936 billion in 177,870 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 8.736 billion shares valued at N134.577 billion that exchanged hands previous week in 180,290 deals.

On market’s performance this week, Cowry Asset Management Limited said, “we anticipate that weak sentiments will persist in the equities market as investors continue to balance profit-taking activities with selective bargain hunting. The release of July CPI figures is expected to further shape trading mood, while ongoing portfolio reshuffling and sector rotation will likely define market dynamics in the near term.

“As corporate earnings season progresses as well as the expectations for Bank financials, market players are digesting company results against the backdrop of cautious trading, while positioning for opportunities in fundamentally strong stocks.”

The firm added that “the current wave of sector rotation reflects investors’ preference for value plays, with price corrections creating attractive entry points despite prevailing volatility.

“Thus, we expect intermittent pullbacks to strengthen the market’s upside potential as investors reallocate portfolios in response to both domestic economic indicators and global market trends. Accordingly, we advise investors to leverage price corrections and maintain a strategic focus on value-driven opportunities, while keeping an eye on macroeconomic developments that could influence sentiment.”

A group of analysts at Cordros Research said, “In the near term, we expect profit-taking to persist, largely concentrated in counters lacking strong fundamentals, while selective buy interest is likely to emerge in fundamentally sound equities.

“Over the medium term, sentiment will likely be shaped by macroeconomic developments — including growth, inflation, and policy direction — as well as movements in fixed income yields, which could further influence asset (re)allocation decisions between equities and debt instruments.”