The Nigerian stock market has suffered heavy losses at the start of September, wiping out nearly N985.7 billion in market value within just two trading days. The downturn, driven by profit-taking in large and mid-cap companies, has left investors rattled as they brace for more volatility in the weeks ahead.
Market capitalisation, which stood at N88.769 trillion at the beginning of September, dropped by 1.11 percent to close at N87.784 trillion by Tuesday. On the first trading day, losses amounted to N362.8 billion, dragged down by sell-offs in Lafarge Africa Plc, Zenith Bank Plc, and 31 other firms. The slump deepened the following day, with another N622.95 billion wiped out, largely due to declines in Lafarge Africa Plc, Guaranty Trust Holding Company (GTCO), and 46 others.
Lafarge Africa emerged as one of the biggest casualties, with its share price plunging from N130 in August to N110.85 per share by September 2, marking a sharp 14.7 percent loss for shareholders. The broader Nigerian Exchange Limited (NGX) All-Share Index mirrored the dip, falling by 1,557.86 basis points to close at 138,737.64 points from August’s 140,295.50 points. Key indices were also under pressure, with the NGX Banking Index dropping 1.93 percent and the NGX Oil & Gas Index sliding 0.36 percent.
Market analysts, however, remain cautiously optimistic. United Capital Plc noted that expectations of a possible interest rate cut by the Central Bank of Nigeria (CBN), moderating inflation, and a relatively stable naira could provide some relief. Similarly, Afrinvest Limited warned that weak investor sentiment may continue to weigh on the market in the near term, though bargain-hunting opportunities in oversold stocks could offer mild rebounds.
Looking ahead, experts from Cowry Asset Management and Cordros Research predict a range-bound trading pattern, with cautious sentiment dominating amid tight liquidity and macroeconomic uncertainties. While sell pressure may persist in the banking and industrial goods sectors, analysts advise investors to focus on fundamentally strong equities, which are better positioned to withstand market shocks and deliver long-term value.
source: This day