Nigerian Stock Market Sheds N4.9trn as Profit-Taking Reverses Bullish Run | NGX Decline Hits Investors

The Nigerian stock market experienced a sharp reversal last week as investors on the Nigerian Exchange Limited (NGX) collectively lost over N4.915 trillion following a wave of profit-taking across key sectors. The decline erased gains from the previous bullish run and signaled a shift in investor sentiment after months of strong performance.

Market capitalisation fell from N160.508 trillion to N155.593 trillion, reflecting a broad pullback in stock valuations. Analysts attributed the downturn to portfolio rebalancing and cautious trading behavior, as investors locked in profits amid concerns that prices had risen too quickly in recent months.

The NGX All-Share Index (ASI) also dropped by 3.1%, closing at 242,593.31 points, down from the previous week’s 250,385.47 points. Selling pressure was widespread across major sectors, including banking, oil and gas, industrial goods, consumer goods, and insurance, indicating weak overall market sentiment.

Several heavyweight stocks contributed significantly to the decline, including FirstHoldCo (-11.4%), BUA Cement (-10.0%), Aradel (-9.5%), MTN Nigeria (-5.5%), and Lafarge WAPCO (-3.5%). Despite the downturn, trading activity surged, with volume rising 71.7% and value increasing 67.9%, showing heightened investor repositioning. Year-to-date returns, however, remained strong at 56.4%, even as month-to-date gains slowed to 0.5%.

Looking ahead, market analysts remain cautiously optimistic. InvestData Consulting noted that while short-term volatility may continue due to profit-taking, strong corporate earnings and improving economic fundamentals support a positive medium-to-long-term outlook. Cordros Capital also emphasized that the market is likely to stay range-bound in the absence of strong catalysts, urging investors to remain selective and focus on fundamentally solid stocks with strong dividend potential.

source: vanguard