The Nigerian stock market continued its downward trend last week, marking its fourth consecutive week of losses. This downturn was largely driven by losses in highly capitalized stocks across various sectors, with notable declines from companies such as BUA Cement, Transcorp, and GTCO. The Nigerian Exchange Limited (NGX) All-Share Index (ASI) dropped by 0.9% week-on-week, closing at 104,962.96 points, down from 105,955.13 points the previous week. The Month-to-Date and Year-to-Date returns moderated to -2.7% and +2.0%, respectively.
The persistent volatility was compounded by global economic uncertainties and local political instability, particularly the ongoing issues in Rivers State. Analysts highlighted that these factors continue to affect investor sentiment, putting pressure on the market despite higher fixed income rates. The broader market sentiment reflected this pressure, with both trading volume and value falling by 12.1% and 25.3%, respectively.
Sector performance was largely negative, with significant declines in the Industrial Goods Index (-3.4%), Insurance Index (-2.9%), Banking Index (-2.6%), and Oil & Gas Index (-1.1%). Only the Consumer Goods Index posted a marginal increase of 0.1%. This negative sectoral performance, coupled with broader market uncertainty, suggests that the overall market outlook remains challenging in the near term.
Looking forward, analysts expect continued volatility as investors await corporate earnings reports and dividend announcements. With global uncertainties and local political concerns still at play, there could be mixed sentiment as market participants look for opportunities in bargain hunting and portfolio reshuffling. The release of Q1 earnings and treasury bill auction rates in the coming weeks could also influence market trends, providing both risks and opportunities for investors.
source: vanguard