Profit-taking actions have continued on the Nigerian Exchange Limited (NGX), where, for the fourth consecutive week, the equities market has witnessed pronounced losses. The principal performance barometer, the NGX All-Share Index (ASI), reflected a Week on Week (WoW) decline of 0.9%.
Throughout the reviewed week, the Index experienced downturns in three out of the four trading sessions. Additionally, another pivotal performance metric, market capitalisation—which gauges the aggregate value of investments held by participants on the Exchange—plummeted by over N833 billion during the four trading days, settling at N87.936 trillion, a decrease from N87.769 trillion in the week prior.
Market players indicated that the prevailing sentiment remains cautious, as investors await a more explicit catalyst such as elevated corporate earnings forecasts, enhanced clarity on macroeconomic policies, or fresh liquidity influx from institutional investors before assuming more assertive long positions.
In the meantime, an analysis of trading patterns revealed sell pressures in WAPCO, resulting in a decline of -13.1%, trailed closely by UBA at -3.9%. Oando’s shares fell by -7.9%, while Dangote Sugar decreased by -5.2%, and Zenith Bank slipped by -1.7%.
The Year-to-Date (YtD) return has moderated to a noteworthy 35.0%. Market engagement also showed dwindling figures, as both trading volume and value experienced a decline of 34.7% WoW and 16.0% WoW, respectively. Sectoral performance reflected the overarching market decline, with all major indices, including Industrial Goods, retreating by -2.1%; the Banking Index by -1.5%; the Consumer Goods Index by -1.2%; Oil & Gas by -0.8%; and the Insurance Index by -0.8%.
In their market outlook report, analysts at Cordros Capital remarked: “Moving forward, investor sentiment is expected to remain cautious, with ongoing profit-taking and selective portfolio reallocation towards fundamentally sound stocks that present attractive entry opportunities. In the medium term, the direction of the equity market will rely heavily on macroeconomic conditions and the trajectory of fixed income yields, which will continue to drive relative asset allocation.”
Similarly, analysts at InvestData Consulting Limited noted: “The outlook for the forthcoming session appears broadly optimistic as bargain hunters and portfolio managers are poised to maintain buying momentum into the weekend. Market engagement is likely to be predominantly influenced by banking stocks, consumer goods, and select oil and gas shares as investors strategically position themselves ahead of upcoming corporate disclosures.
Nevertheless, traders should remain vigilant for profit-taking around critical resistance levels, particularly in stocks that have experienced substantial short-term gains.”
