The Nigerian Exchange's (NGX) All-Share Index (ASI) recorded a 9.5% gain in the third quarter, rising 21,792.49 points from 229,419.18 at the end of June to 251,211.67 at September 30. Equity market capitalisation increased by N15.89 trillion, from N147.22 trillion to N163.10 trillion. However, beneath the headline gain, investors rotated sharply between sectors and stocks, with most equities ending the quarter lower.
A total of 130 equities were traded during the quarter, with 72 declining, 44 gaining, and 14 remaining unchanged. Decliners accounted for 55.4% of the stocks tracked, compared with 33.8% for gainers, resulting in an advance-decline ratio of just 0.61 times. This divergence highlights the concentration of the rally, with capital moving towards specific stocks and sectors at different points in the three months.
July marked a significant rotation, with investors returning strongly to equities after the 8.37% correction in June. The ASI gained 6.92% to 245,283.68 points, and market capitalisation added N11.11 trillion to reach N158.33 trillion. Banking stocks led the sector rally, jumping 22.10%, while Insurance gained 9.29%, Industrial Goods rose 3.57%, and Oil and Gas increased 3.21%. However, Consumer Goods fell 4.11%, indicating a selective recovery.
FirstHoldCo emerged as a symbol of the July move, with its share price rising 131.13% from N56.05 at the end of June to N129.55 at the end of July. The sharp increase came as investors increased exposure to banking and other large-cap stocks around the half-year earnings season and other corporate developments.
August interrupted the momentum, with the ASI falling 0.44% to 244,199.39 points, and market capitalisation slipping about N590 billion to N157.74 trillion. However, the modest monthly decline concealed considerable volatility, with the index falling to 238,682.92 points during the month before recovering. Sector performance again showed that the market was not moving as one block.
September brought the next leg of the rotation, with the ASI rising 2.87% to 251,211.67 points, and market capitalisation adding N5.37 trillion to N163.10 trillion. Oil and Gas became the dominant sector, surging 18.86%, while NGX Group gained 35.68%, Seplat Energy rose 29.86%, and VFD Group advanced 28.89%. The moves showed that the September rally was concentrated in selected counters, particularly energy and capital-market-related plays.
Over the full quarter, FirstHoldCo was the biggest gainer, soaring 185.28%, followed by Eterna with a 58.56% gain, NGX Group with 58.15%, Seplat Energy with 40.80%, and VFD Group with 38.76%. The difference between sector performance and market breadth reinforces the concentration of the rally, with trading activity also showing where investors were most engaged, with Financial Services accounting for N1.49 trillion of quarterly turnover.
Key points
- The NGX's Q3 performance was marked by a concentration of gains in specific sectors and stocks.
- Investor rotation between sectors and stocks was a defining feature of the quarter.
- The rally was not broad-based, with 72 stocks declining during the quarter.
