Equities market sheds 1.20% w/w as investors lose N1.91trn

Nigerian equities investors lost approximately N1.91 trillion in market value during the week, as sustained profit-taking across major consumer, telecommunications and banking stocks pushed the NGX All-Share Index down 1.20 per cent week-on-week (w/w) to 242,619.20 points, while market capitalisation fell to N156.62 trillion from the previous week.

The NGX All-Share Index closed the week at 242,619.20 points, down from the previous week’s level, while market capitalisation fell 1.19 per cent to N156.62 trillion. The market’s year-to-date return consequently moderated to 55.91 per cent from 57.81 per cent a week earlier.

The weekly decline was driven principally by selling in MTN Nigeria, BUA Foods and Zenith Bank, which fell 4.73 per cent, 10 per cent and 2.70 per cent respectively.

The losses outweighed gains in Airtel Africa, up 8.59 per cent, GTCO, which gained 0.39 per cent, and Access Holdings, up 0.37 per cent.

The performance reflects a broader bout of profit-taking after the equities market’s strong rally earlier in the year, as investors continue to reposition portfolios and lock in gains in heavily valued counters.

Friday’s session extended the weakness, with the benchmark index and market capitalisation each falling 0.16 per cent.

Wema Bank, UBA and Fidelity Bank were among the major decliners on the final trading day, falling 0.67 per cent, 1.09 per cent and 2.27 per cent respectively, while Zenith Bank, GTCO and Cornerstone Insurance posted gains of 0.49 per cent, 0.39 per cent and 1 per cent.

Trading activity weakened significantly on Friday, with volume falling 66.64 per cent to 1.41 billion units and transaction value declining 10.53 per cent to N45.31 billion.

Cornerstone Insurance led trading volume with 100.29 million units, while MTN Nigeria accounted for the highest transaction value at N31.37 billion.

Market breadth remained negative at 0.89x, with 28 stocks declining against 25 gainers, indicating that selling pressure was slightly broader than buying interest.

International Energy Insurance led the gainers with a 9.92 per cent increase, while Omatex recorded the largest decline at 9.04 per cent.

The weaker domestic equities market coincided with a relatively stable foreign exchange market, with the Nigerian Foreign Exchange Market closing at N1,357.61/$.

In the commodities market, Brent crude rose 1.42 per cent to $87.08 per barrel, while US West Texas Intermediate gained 1.01 per cent to $81.37, as concerns over possible disruption to Middle East crude supplies increased after the United States threatened an indefinite naval blockade of Iran.

The global environment also provided mixed signals for investors. US retail sales declined in July for the first time in nine months, adding to recent evidence of weaker consumer activity and reinforcing expectations that the Federal Reserve may refrain from raising interest rates in September.

Meanwhile, the NASD over-the-counter market also ended lower, with its Securities Index and market capitalisation declining 2.43 per cent week-to-date to 4,544.20 points and N2.73 trillion respectively.

Despite the decline in the benchmark, trading activity on the OTC market strengthened sharply, with volume rising 1,173.77 per cent to 1.91 million units and transaction value increasing 1,029.52 per cent to N210.84 million.

The week’s performance therefore leaves the NGX with a substantial year-to-date gain but confirms that investors are becoming increasingly selective after the market’s powerful advance.

The key question for the coming week is whether the correction will stabilise at current levels or deepen as investors continue to take profits in major counters.