Volatile Week As Equity Market Sheds N623bn In Value

Last week, the equity market in Nigeria faced turbulence, losing N623bn in value as fund managers maneuvered their portfolios ahead of the impending first-quarter results.

The market indices took a hit, with a decline of 1.08 percent, settling at 103,437.67 points, while the market capitalization dropped by 1.05 percent to close at N58.5tn.

Analysts pointed out that market dynamics were heavily influenced by investor reactions to released corporate earnings and efforts by fund managers to rebalance their portfolios in anticipation of the first-quarter results of 2024.

Trading activities surged as investors exchanged 3.68 billion units of shares valued at N57.89bn in 40,726 deals, marking a significant increase from the previous week’s performance.

The consumer goods and growth sectors were the outliers, managing to appreciate by 0.94 percent and 0.32 percent, respectively.

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This uptick was driven by notable activities in certain stocks despite adverse price movements in May & Baker, Dangote Sugar, and Ikeja Hotel.

Conversely, the banking index plummeted by 6.73 percent, primarily due to adverse price movements in leading banking stocks. Additionally, the insurance and industrial goods sectors closed negatively, with declines of 0.85 percent and 0.27 percent, respectively.

The oil & gas sector witnessed a relatively subdued performance compared to the previous week.

The financial services industry dominated trading activities, accounting for 78.29 percent of the total equity turnover volume and 79.81 percent of the value traded.

Abbey Mortgage Bank, Tourist Company of Nigeria, and Zenith Bank were the top three equities traded during the week, contributing significantly to the turnover volume and value.

In light of the market performance, investment banker and stockbroker, Tajudeen Olayinka, provided insights into the outlook for the second quarter. He remarked, “The first quarter of 2024 showcased promising performances, particularly in January and February.

Despite some challenges in March, including socioeconomic disruptions and profit-taking, certain sectors notably outperformed the market.”

Olayinka expressed optimism regarding the market’s performance in the second quarter, attributing it to the Central Bank of Nigeria’s efforts to stabilize the exchange rate and inflows from foreign portfolio investors and Diaspora remittances.