The Nigerian equities market closed the final trading session of September on a bearish note, extending its downward momentum to a second consecutive day. Aggressive profit-taking wiped out N894.36bn in total investor wealth across Tuesday and Wednesday. This significant decline was driven by sell-offs in heavyweight blue-chip stocks, with tier-one lenders and telecommunications majors absorbing heavy pressure.
On Tuesday, the All-Share Index dropped by 721.91 points or 0.29 per cent to settle at 251,913.20 points, erasing previous gains and shaving N468.63bn off equity valuation. The downward momentum persisted into Wednesday, with the benchmark index sliding an additional 0.28 per cent to close at 251,211.67 points. This dragged the total market capitalisation down from its week-opening level of N163.99tn to N163.10tn.
The selling pressure on Tuesday was led by sharp declines in Sovereign Trust Insurance, Unilever Nigeria, Neimeth International Pharmaceuticals, and BUA Cement, alongside key financial heavyweights like GTCO and Zenith Bank. Despite the broad-based slide, insurance stocks managed to buck the trend, recording a slight sectoral gain. However, the broad market sentiment shifted further into negative territory on Wednesday.
On Wednesday, telecom titan MTN Nigeria Communications fell by 3.01 per cent, alongside tier-one banking giants Access Holdings, United Bank for Africa, and GTCO. Learn Africa and Thomas Wyatt Nigeria led the decliners’ chart. The NGX Premium Index also dropped 1.02 per cent, indicating a significant decline in the market.
Despite the prevailing bearish environment, selective buying interest provided partial relief to the overall index. BUA Cement staged a strong recovery on Wednesday, advancing N9.20 to finish at N297.00 per share. This propelled the NGX Industrial Index up by 0.66 per cent after its Tuesday dip. Consumer goods and growth stocks also recorded slight upticks on Wednesday.
Market turnover remained active throughout the downturn, with 548.65 million shares traded in 47,203 deals on Tuesday. This expanded to 1.035 billion shares across 44,398 deals on Wednesday, heavily driven by high-volume exchanges in VFD Group, UAC of Nigeria, Abbey Mortgage Bank, Chams Holding Company, and GTCO. The active market turnover indicates that investors continued to trade despite the bearish market.
The two-day profit-taking that dragged the NGX down by N894bn highlights the volatility in the Nigerian equities market. As investors navigate the market, they are advised to make informed decisions, considering various market indicators and trends. The market's performance is expected to be influenced by various factors, including economic trends, corporate earnings, and investor sentiment.
Key points
- The Nigerian equities market experienced a significant decline due to profit-taking.
- The market capitalisation dropped from N163.99tn to N163.10tn over the two-day period.
- Selective buying interest provided partial relief to the overall index, with some stocks staging a recovery.
