Emmanuel Ochayi
Nigeria’s equity market started March with a decline, as the Nigerian Exchange Limited (NGX) All-Share Index (ASI) fell by 0.34 percent at the close of trading on Monday, March 3. The market, which ended February at 107,821.39 points, dropped to 107,455.13 points, reflecting a decrease in investor confidence.
Similarly, the equities market capitalisation declined from N67.193 trillion to N67.287 trillion. Despite the downturn, analysts believe the market could recover in the coming days.
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Analysts Expect Market Rebound
Market experts at Futureview Research anticipate a turnaround in the equity market, noting that investor interest in undervalued stocks may drive a positive trend.
“Favourable corporate actions and strong earnings reports are expected to boost sentiment and support market recovery,” Futureview analysts stated in their March 3 note.
Similarly, United Capital analysts believe that the market could maintain a positive outlook as investors position themselves ahead of the FY-2024 earnings season. However, they cautioned that high interest rates in the fixed-income market might continue to create bearish sentiment.
Banking Stocks Remain Volatile
Trading activities showed mixed performance across different sectors, with banking stocks experiencing notable movements. Shares of Zenith Bank, Fidelity Bank, Access Holdings, NGX Group, and Ellah Lakes recorded significant fluctuations.
While NGX Group led the list of major gainers, rising from N30 to N33 (a 10 percent increase), Africa Prudential recorded the biggest loss, dropping from N35.40 to N32.05, a decline of 9.46 percent.
Trading Volume and Market Sentiment
A total of 308,089,254 shares worth N7.231 billion were exchanged in 15,474 deals on Monday. However, the market’s positive return for March so far stands at 4.40 percent, reflecting investor caution.
Vetiva Research analysts noted that market performance remained mixed, with some stocks gaining while others struggled. They expect cautious trading in the coming sessions as investors react to earnings results and sector-specific developments.
“The market is expected to remain cautious as investors digest today’s mixed performance. Persistent weakness in banking stocks could keep sentiment subdued, while earnings-driven moves may drive volatility in select counters,” Vetiva analysts noted in their post-market commentary.
Equity Market Outlook for the Week
Despite the slow start to March, analysts maintain an optimistic view of the equity market. They highlight that corporate earnings and investor positioning ahead of financial reports could drive renewed interest. However, concerns over high-interest rates in the fixed-income market may weigh on investor sentiment.
Market watchers will be closely monitoring the performance of key stocks and any corporate actions that may influence market direction in the coming days.
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.
