Investors suffer N532bn loss in a week due to rising volatility

The Nigerian stock market section of the Nigerian Exchange Limited (NGX) underwent a challenging week, experiencing a N532 billion loss and elevated volatility on select blue-chip shares. The main market indicator, NGX All-Share Index, endured a downward spiral for the week, plummeting by 0.94 percent to conclude at 104,962.96 basis points.

The disappointing performance resulted in a further weakening of the year-to-date return on the NGX ASI, settling at 1.98 percent. Consequently, the aggregate market capitalization of listed equities contracted by N532 billion week-on-week, culminating at N65.820 trillion. This drop in market value exacerbated negative sentiments among equity investors.

The sustained downturn was largely due to investor responses to shifting global economic circumstances, even in the wake of a positive Consumer Price Index (CPI) report for February 2025 indicating a second successive month of declining inflation rates. Despite these favorable macroeconomic indicators, the prevailing bearish sentiment prevailed, triggering prolonged selling activities across diverse market segments.

The prevalent negative market breadth and weakened internal fundamentals compounded the decline in investor confidence, fostering a cautious approach among market players.

Sector-wise, market performance leaned towards bearish territory. The NGX Consumer Goods index experienced a slight uptick of 0.06 percent week-on-week. Conversely, the NGX Industrial index faced the most significant drop, plunging by 3.39 percent W-o-W. Similarly, both the NGX Insurance index and the NGX Banking index observed a weekly downturn of 2.87 percent and 2.55 percent, respectively. The NGX Oil & Gas index and the NGX Commodity index also endured losses, slipping by 1.08 percent and 0.45 percent, respectively, for the week.

The market breadth for the week was tilted towards the negative side, with 32 equities seeing price appreciation, 48 equities witnessing price depreciation, and 70 equities remaining unchanged. Neimeth International Pharmaceuticals emerged as the top gainer, securing a 20.48 percent increase to close at N3.00 per share. On the contrary, e-Tranzact International led the decliners with a 26.15 percent drop to rest at N4.80 per share.

In total, investors swapped about 2.902 billion shares valued at N48.064 billion through 57,044 deals last week. This marked a decline from the prior week’s 3.281 billion shares worth N63.517 billion traded in 60,782 deals.

Moving forward, analysts at Cordros Research anticipate sustained market turbulence as investors review various audited earnings reports and forthcoming dividend declarations. Cowry Assets Management Limited expects the equities market to undergo further corrections and portfolio adjustments, as investors digest corporate earnings updates and assess the broader implications of macroeconomic data releases.

The market’s short-term trajectory will likely be shaped by global financial market performance, the Central Bank of Nigeria’s (CBN) monetary policy decisions, and investor sentiment towards Nigeria’s economic future. Given these dynamics, investors are encouraged to focus on stocks with robust fundamentals.