The Nigerian equities market experienced one of its steepest drops in trading volume last week, falling nearly 79 percent to 3.69 billion units, despite a positive price rally. Turnover value also plunged by over 77 percent to N112.26 billion, marking a stark contrast to the previous week’s robust activity. Nonetheless, the NGX All-Share Index rose by 2.18 percent, closing at 134,452.93 points, with market capitalization increasing by N1.81 trillion to N85.06 trillion, pushing the year-to-date return to over 30 percent.
Market analysts attributed the low trading activity to cautious investor sentiment and portfolio adjustments ahead of month-end, with institutional players playing a significant role in the subdued turnover. Positive market sentiment was reflected in the broader market, as more stocks appreciated in value than declined. Sector indices also closed in positive territory, led by gains in industrial goods, insurance, and consumer goods sectors.
The rally was fueled by strong corporate earnings and declining fixed income yields, encouraging investors to pivot from debt to equities. However, despite the upbeat market, economic indicators remain mixed. The Central Bank of Nigeria’s Monetary Policy Committee held interest rates steady due to uneven inflation trends — while headline inflation eased slightly, core and food inflation edged higher. Structural challenges and external risks continue to exert pressure on inflation and the broader economy.
Looking ahead, the market may see increased activity as more corporate earnings reports emerge and investors rebalance portfolios. However, analysts caution that sustained momentum depends on a recovery in trade volumes and significant easing of inflationary pressures. Meanwhile, trading in MRS Oil Nigeria Plc remains suspended pending its planned delisting, adding another layer of market complexity.
Source: The sun