Nigeria’s Stock Market Declines By 0.04% As Investors Take Profits

Nigeria’s stock market dropped by 0.04% on Monday as investors took profits following a record rally last week. The market, which had gained N884 billion in value, saw a slight correction as some stocks recorded losses.

Major losers on Monday included International Energy Insurance, RT Briscoe, and Julius Berger. International Energy Insurance dropped from N2.50 to N2.25, losing 25 kobo or 10 percent. RT Briscoe also declined from N2.70 to N2.44, shedding 26 kobo or 9.63% . Similarly, Julius Berger fell from N139.80 to N128, losing N11.80 or 8.44%.

Stock Market Performance Indicators

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalization decreased slightly. The ASI fell from 105,933.03 points to 105,891.33 points, while market capitalization dropped from N65.592 trillion to N66.069 trillion.

Despite the slight drop, the year-to-date (YtD) return remains positive at 2.88 percent. In February alone, the stock market has gained 1.34 percent.

READ ALSO: Nigerian Stock Market Gains N884 Billion As Investors Push Market Higher

On Monday, investors traded 567,288,779 shares in 17,843 deals, with a total market value of N10.413 billion. Actively traded stocks included Secure Electronic Technology Plc, Fidelity Bank, Access Holdings, UPDC, and AIICO.

Analysts Predict Mixed Market Trends

Analysts expect the stock market to experience mixed performance as investors take profits while also positioning for future opportunities.

Futureview analysts stated, “We anticipate a mixed market performance as investors lock in profits from recent gains. However, strategic positioning for dividend payouts amid strong earnings is expected to sustain market interest. Investors should balance short-term profit-taking with long-term value opportunities in fundamentally strong stocks.”

United Capital Research analysts also shared their outlook for the stock market. They said, “The equities market is expected to maintain its positive momentum as investors continue to position themselves ahead of the FY-2024 earnings season and possible corporate action declarations. Nevertheless, given the elevated interest rate environment in the fixed-income market, we still expect bearish sentiments to linger in the background.”

Expectations for the Week

Analysts at Meristem Research believe the stock market will remain active due to bargain hunting and the ongoing earnings season.

“We expect the market to maintain its positive momentum, driven by bargain hunting and ongoing earnings releases. We expect investors to position in high-performing sectors, particularly in expectation of dividend qualification,” they said.

They also noted that moderating fixed-income yields could drive more funds into the stock market. However, profit-taking could introduce some volatility.

“Also, with continued moderation in fixed-income yields and a rotation of funds, we expect increased participation in the equities market. However, we acknowledge the potential for profit-taking on tickers that have recorded gains in recent weeks, which could introduce some volatility. Overall, we expect the local bourse to end the week in the green zone,” the analysts added.

Market Outlook

Despite Monday’s slight dip, analysts remain optimistic about the stock market’s future performance. While some investors continue to take profits, others are expected to take advantage of bargain opportunities ahead of corporate earnings announcements. The balance between profit-taking and fresh investments will determine the market’s direction in the coming days.