NGX rally hits 61.4% YTD as turnover jumps 56% despite market

Nigeria’s equities market remained firmly in positive territory on Wednesday despite a mild correction, with the a All-Share Index falling 0.28 per cent as trading activity surged and the market’s year-to-date gain remained above 61 per cent.

The index closed at 251,211.67 points, down from 251,924.25 points in the previous session, while market capitalisation declined 0.26 per cent to N163.10 trillion.

The pullback reduced the year-to-date return to 61.43 per cent from 61.88 per cent, but the market remains substantially higher than at the beginning of the year.

The more important signal from Wednesday’s session was the sharp rise in trading activity. Total volume increased 88.71 per cent to 1.04 billion shares, while transaction value jumped 56.39 per cent to N53.63 billion.

VFD Group dominated volume with 367.32 million shares traded, while UAC Nigeria accounted for the highest transaction value at N21.51 billion.

Despite the increase in turnover, market breadth was negative, with 30 stocks declining against 25 gainers, producing a breadth ratio of 0.83 times.

The decline in the index was driven mainly by losses in MTN Nigeria, which fell 3.01 per cent, Access Holdings, down 2.25 per cent, and GTCO, which lost 0.38 per cent.

BUA Cement gained 3.20 per cent, Oando rose 1.45 per cent, and Wema Bank advanced 1.61 per cent. Learn Africa was the biggest decliner, falling 10 per cent, while HMCALL led gainers with a 10 per cent increase.

The latest movement suggests that investors are increasingly rotating between counters after the market’s exceptionally strong run this year. With equities up 61.43 per cent year-to-date, profit-taking is becoming more visible even as substantial liquidity continues to circulate through the market.

The rise in turnover is significant for the quality of the rally. It indicates that investors are still actively repositioning portfolios rather than the market advancing on thin transactions.

The strong performance also comes as Nigerian banks and other major companies continue to report earnings growth and investors reassess valuations following the banking recapitalisation exercise.

On the foreign exchange market, the naira appreciated marginally by 0.01 per cent to N1,331.20 per dollar, providing some stability for investors assessing the impact of exchange-rate movements on corporate earnings.

The global backdrop remains mixed. Oil prices are being supported by continuing supply concerns in the Middle East, while expectations around US monetary policy remain sensitive to inflation and consumer-spending data.

For Nigerian investors, the market’s latest performance presents a familiar balance between strong returns and rising valuation risk. The 61.43 per cent year-to-date gain has created substantial wealth, but sustaining the rally will increasingly depend on corporate earnings, dividends and the ability of businesses to convert improved operating conditions into stronger cash flows.