The Nigerian Exchange (NGX) faced a sharp downturn last week, with market capitalisation dropping by N440.51 billion to settle at N65.71 trillion. This decline came despite a wave of dividend announcements and fresh corporate disclosures, as both local and global economic uncertainties shook investor confidence. The NGX All-Share Index (ASI) lost 0.9% to close at 104,563.34 points—its lowest level in a month—signaling a persistent bearish trend. Even a temporary reprieve on U.S. tariffs failed to lift investor mood, as local traders leaned into profit-taking and portfolio adjustments.
Market breadth was decisively negative, with 27 gainers against 56 losers, reflecting widespread selloffs across sectors. Defensive reallocation dominated as investors exited overbought positions, with Insurance stocks hit hardest, dropping 4.6% on the back of losses in Royal Exchange and Lasaco. Banking stocks also took a hit, falling 2.2%, while the oil, consumer goods, and industrial sectors all posted moderate declines. Even the listing of nearly 6 billion new shares by First HoldCo couldn’t offset the negative momentum gripping the market.
Despite the drop, trading activity picked up, with weekly volumes and trade values surging by 76.9% and 83.5% respectively, suggesting pockets of speculative interest. Stocks like VFD Group and Union Dicon posted impressive gains, bolstered by momentum-driven buying. However, the overall tone remained cautious, as steep losses in names like Royal Exchange and SovereignTrust Insurance dragged market sentiment lower. Deal counts also rose, hinting that some investors are bargain-hunting among undervalued or volatile stocks.
Analysts say the market remains in oversold territory, leaving room for a short-term technical rebound. However, a more sustained recovery hinges on improved macroeconomic indicators, clearer fiscal and monetary policies, and stronger earnings reports. The upcoming March inflation figures and Q1 GDP report are expected to be key catalysts. Until then, cautious optimism is likely to prevail, with investors leaning toward value-driven, dividend-paying stocks as they navigate an increasingly complex and uncertain investment climate.
SOURCE: Guardian