Investors Hit by Market Slump as ASI Drops 2.03%, Losing N1.22trn Wiped Out

Samuel Mobolaji

The Nigerian equities market faced a challenging week as the All-Share Index (ASI) declined by 2.03 per cent week-on-week (W-o-W) to settle at 97,432.02 points, resulting in a market capitalisation loss of N1.222 trillion, closing at N59.039 trillion.

This downturn reflects a broad decline in market sentiment, particularly impacting several key sectors.

Sectoral performance indicated widespread losses, with the NGX Industrial Goods Index taking the most significant hit, falling by 3.70 per cent W-o-W.

The NGX Insurance Index also recorded a weekly dip of 0.40 per cent, and the NGX Consumer Goods Index followed suit, slipping by 0.22 per cent. However, some sectors managed to post gains: the NGX Oil & Gas sector rose by 1.15 per cent W-o-W, and the NGX Banking Index saw a modest increase of 0.19 per cent.

Market breadth was negative as the number of declining stocks outpaced gainers; 45 equities depreciated, 39 appreciated, and 68 remained unchanged. Transnational Corporation (Transcorp) topped the gainers’ list with a significant 314.03 per cent surge, closing at N45.75 per share.

Eunisell Interlinked followed with a 60.57 per cent increase, ending the week at N5.62, and John Holt gained 20.00 per cent to close at N3.30 per share. On the decliners’ end, Aradel Holdings fell by 25.75 per cent to N445.60 per share, while Caverton Offshore Support Group and Ellah Lakes declined by 20.00 per cent and 12.59 per cent, closing at N2.00 and N3.54 per share, respectively.

Trading volumes rose, with investors exchanging a total of 2.717 billion shares valued at N54.632 billion in 46,848 transactions. This was an increase over the previous week’s 2.142 billion shares worth N85.946 billion in 41,217 deals.

The Financial Services sector led the trading activity by volume, contributing 1.821 billion shares valued at N28.958 billion in 20,173 deals, representing 67.01 per cent and 53.01 per cent of total equity turnover volume and value, respectively.

The ICT and Conglomerates sectors followed, with 389.848 million shares worth N6.560 billion and 160.993 million shares worth N4.746 billion, respectively.

The top three equities by trading volume – Fidelity Bank, Chams Holding Company, and United Bank for Africa (UBA) – contributed a combined 1.225 billion shares worth N17.721 billion across 4,912 transactions, making up 45.10 per cent and 32.44 per cent of the total equity turnover volume and value.

Investors faced a turbulent week with mixed results across sectors, as gains in the Oil & Gas and Banking sectors offered some reprieve amid broad losses in Industrial Goods and Insurance. Market participants are closely watching economic indicators for potential signs of stabilisation in the coming week.

To this end, capital market analysts anticipated cautious trading in the local stock market this week due to the absence of significant positive catalysts to boost sentiments.

For instance, analysts at Cowry Assets Management Limited said, “the ASI’s decline underscores continued caution among investors, many of whom are taking a risk-off stance amidst fluctuating economic indicators, uncertain earnings outlooks, and ongoing corporate actions.

“Persistent liquidity concerns and inflationary pressures appear to have dampened investor enthusiasm, with many awaiting clearer signals on monetary policy and potential fiscal measures before making fresh commitments.”

Looking ahead, Afrinvest stated that, “the market is likely to remain volatile in the near term considering the cautious sentiments of investors. However, positive developments, such as improved corporate earnings or stabilising macroeconomic conditions, could help bolster investor confidence and drive a recovery.”