Nigeria’s equity markets extended bearish momentum with investors losing N439 billion in weekly trading, as the NGX All-Share Index declined 0.50% to 140,295.50 points while market capitalization fell to N88.769 trillion, maintaining cautious sentiment despite strong year-to-date performance.
The sustained negative trajectory reflects broader macroeconomic pressures affecting investor confidence, with market breadth showing weak fundamentals as only 31 stocks gained value against 57 decliners during the trading week.
McNichols emerged as the leading gainer with an 18.75% surge to N3.80 per share, followed by NEM Insurance’s 17.29% increase to N31.20 and Berger Paints’ 15.31% rise to N36.90, providing limited bright spots in an otherwise challenging trading environment.
Conversely, Secure Electronic Technology led declines with a 22.73% drop to 85 kobo per share, while Guinea Insurance fell 19.77% to N1.42 and Lasaco Assurance declined 13.29% to N3.00, highlighting sector-specific pressures affecting technology and insurance stocks.
Trading activity decreased significantly with 3.199 billion shares worth N85.399 billion changing hands in 142,477 deals, compared to the previous week’s 4.773 billion shares valued at N107.426 billion across 152,965 transactions, indicating reduced investor participation.
“The equity market could be cautiously optimistic, driven by expectations of a potential interest rate cut from the Central Bank of Nigeria due to moderating inflation, alongside a relatively stable Naira and an increase in foreign reserves,” projected United Capital Plc analysts.
Market outlook remains mixed, with Cowry Asset Management Limited anticipating “cautious sentiment likely to dominate amid tight liquidity and lingering macroeconomic pressures,” while expecting sell pressure in banking and industrial goods sectors to persist.
Potential recovery opportunities exist through bargain-hunting in oversold counters, particularly within consumer goods and insurance sectors, though analysts expect range-bound trading with slight bearish bias absent major policy announcements or corporate catalysts.
Afrinvest Limited forecasts “a modest rebound on the bourse, driven by strategic cherry-picking following recent price corrections, alongside improved system liquidity from FAAC allocation disbursements” supporting selective investment activity.
The market maintains a robust 36.31% year-to-date return despite recent losses, demonstrating resilience while investors navigate challenging macroeconomic conditions including inflation pressures, currency fluctuations, and monetary policy uncertainty.
Strategic positioning in fundamentally strong stocks remains advisable as market participants await clearer economic signals, with potential interest rate adjustments and government fiscal policies likely to influence investor sentiment in coming trading sessions.
Professional analysis suggests the current correction provides entry opportunities for long-term investors, particularly in sectors showing oversold conditions while maintaining exposure to quality companies with strong fundamentals and growth prospects.
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