Emmanuel Ochayi
The Nigerian equity market experienced its first negative close of the year on Tuesday, driven by significant sell-offs in key stocks.
This downturn comes despite earlier optimism for continued growth, marking a critical shift in investor sentiment.
Join our WhatsApp ChannelMajor Stocks Lead the Decline
The Lagos bourse saw notable losses, particularly in the insurance and financial sectors. Sunu Assurances led the decline with its share price dropping from N11.12 to N10.01, a loss of N1.11 or 9.98 per cent. Cornerstone Insurance followed closely, seeing its price fall from N4.61 to N4.15, shedding 46 kobo or 9.98 percent.
RT Briscoe, another significant player, saw its share price decrease from N3 to N2.70, losing 30 kobo or 10 percent. Similarly, FTN Cocoa’s price fell from N2 to N1.80, and Veritas Kapital Assurance dropped from N1.70 to N1.53, both marking a 10 percent decline.
Analysts’ Mixed Expectations on Equity Market
Ahead of Tuesday’s trading, Vetiva analysts had anticipated ongoing portfolio rebalancing from fund managers to influence market direction. They noted that investors were likely to trade in line with expectations for FY’24 earnings. However, the day’s outcome defied some expectations of a continued rally.
“We expect ongoing portfolio rebalancing from fund managers to sway market direction, while we foresee investors remaining active and trading in line with anticipation of FY’24 earnings,” Lagos-based Vetiva research analysts said ahead of Tuesday’s trading.
Meristem analysts shared their outlook, predicting sustained bullish momentum and dominant buying activity throughout the week. They suggested that investors would continue to focus on fundamentally strong stocks and that mild sell-offs might occur as part of portfolio rebalancing.
“This week, we anticipate a sustained bullish momentum in the local bourse this week. We expect dominant buying activity and bargain hunting to characterise trading activities as investors position in fundamentally strong stocks to start the year.
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“In our view, investors will continue to rotate into sectors – particularly value stocks – poised to record impressive earnings performance in the current year. However, mild sell-offs may occur on certain tickers as investors rebalance their portfolios toward more attractive opportunities,” Meristem analysts said in their January 6 note.
“On a balance of factors, we maintain a positive outlook for the week- barring any dampening sentiment trigger and expect the NGX All-Share Index (NGXASI) to close in the green zone,” they further said.
Trading Activity and Market Performance
On Tuesday, active trading was observed in stocks like FBN Holdings, AIICO, Tantalizers, Universal Insurance, and Regency Assurance. A total of 1,112,216,698 shares were traded in 16,617 deals, amounting to N14.638 billion.
The Nigerian Exchange (NGX) All-Share Index (ASI) and Market Capitalisation both depreciated by 0.24 percent. The ASI fell from 103,648.24 points to 103,398.82 points, while the Market Capitalisation decreased from N63.203 trillion to N63.051 trillion.
Outlook for the Week
Despite Tuesday’s dip, analysts maintain a cautiously optimistic outlook. They predict that the NGX All-Share Index could still close in the green for the week, barring any significant dampening factors. Investors are expected to continue rotating into sectors with strong earning potentials, while closely monitoring any market triggers.
The equity market’s first negative close of 2025 reflects the complex dynamics at play, with ongoing portfolio adjustments and investor positioning shaping the trading landscape. The coming days will be crucial in determining whether the market can regain its bullish momentum.
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.
