Emmanuel OchayiNigerian Equity Market Sees Decline as Key Stocks Struggle
The equity market in Nigeria began the week on a down note as investors’ sentiment remained bearish.
The Nigerian Exchange Limited (NGX) reported a negative start to this week’s trading, with the NGX All-Share Index (ASI) dropping by 1.36 percent. Stocks like Dangote Cement, Beta Glass, and Africa Prudential led the decline.
Join our WhatsApp ChannelSignificant Losses in Major Stocks
Dangote Cement Plc, a major player in the equities market, witnessed a significant decline. Its share price fell by N59.10, or 10 percent, from N591.10 to N532.
This substantial drop contributed heavily to the overall market downturn. Beta Glass also saw a decrease, with its share price dropping from N53 to N48, a loss of 9.76 percent.
Similarly, Africa Prudential’s shares fell from N9.30 to N8.40, a decline of 9.68 percent.
“Investors are currently facing a challenging market environment,” said an analyst at United Capital Research.
“The equity market is expected to show mixed performance as investors adapt their strategies. While some are engaged in selective buying of fundamentally strong stocks, others are cautious.”
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Impact of Fixed-Income Market on Equities
The market’s struggles are compounded by factors in the fixed-income market. Elevated interest rates have provided attractive yields, drawing investors away from equities and into fixed-income securities.
This shift in investor preference is putting additional pressure on the equities market.
“Higher fixed-income yields are likely to exert negative pressure on the equities market,” the analyst added. “Investors are capitalising on these higher returns, which contributes to the current bearish sentiment in the equities market.”
Market Activity and Predictions
Despite the recent downturn, there are expectations for increased market activity. Analysts predict that ongoing bank recapitalisation efforts and anticipated corporate actions will boost market activity.
However, these factors may not be enough to reverse the current negative trend.
“While we expect some bargain hunting on stocks that have declined, overall, the equities market is likely to remain in a bearish state,” said analysts at Meristem Research. “Fixed-income market activities, including domestic USD-bond and FGN Naira bond auctions, could further dampen investor interest in equities.”
Trading Volume and Key Players
In the latest trading session, investors engaged in 9,291 deals, trading 3,546,022,683 stocks valued at N7.64 billion.
Key stocks such as GTCO, Wema Bank, Access Holdings, and UBA were actively traded, though overall sentiment remained subdued.
“The market is currently facing headwinds,” noted a market expert. “With ongoing caution among investors and pressure from the fixed-income market, we expect the equities market to close in the red zone this week.”
The market’s recent performance reflects a cautious investor outlook amid fluctuating conditions.
As investors navigate these challenges, the market’s trajectory will depend on how quickly it can adapt to changing economic signals and opportunities.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
