Profit-Taking Triggers N2.29tr Loss in Nigerian Equities
Nigerian equities closed weekend with their biggest loss in recent period as investors scrambled to lock in capital gains on several leading stocks in the financial services and industrial goods sectors.
Average market return declined by 2.51 per cent, equivalent to net capital depreciation of N2.29 trillion for the five-day trading week.
This moderated the average year-to-date return for Nigerian equities to 37.0 per cent and nearly wiped out the entire gain so far this month at 0.82 per cent.
The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Exchange (NGX) closed weekend at 141,004.14 points as against the week’s opening index of 144,628.20 points, a drop of 2.51 per cent.
Aggregate market value of all quoted equities at the NGX also dropped simultaneously from the week’s opening value of N91.502 trillion to close weekend at N89.209 trillion, a loss of N2.29 trillion or 2.51 per cent.
The congruence between the decline in ASI and market capitalisation indicated that the entire loss of N2.29 trillion was due to declines in share prices of quoted companies, rather than other adjustments such as delisting and consolidation of shares.
With 43 gainers to 54 losers, the negative overall market position was due to widespread selloffs across the sectors, especially within the highly influential banking and industrial goods sectors. Insurance stocks, which had seen a major rally in the wake of the passage of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, came under intense profit-taking trading, with the NGX Insurance Index dropping by 4.17 per cent.
The market position was particularly driven by losses by highly capitalized stocks such as Dangote Cement, BUA Cement, Lafarge Africa, MTN Nigeria Communications, Guaranty Trust Holding Company (GTCO), Zenith Bank and Stanbic IBTC Holdings among others.
Most sectoral indices closed on the negative with the NGX Industrial Goods Index, which tracks cement companies, recording the highest loss of 8.42 per cent.
The NGX Banking Index dropped by 3.48 per cent while the NGX Oil and Gas Index dipped by 0.84 per cent. The NGX 30 Index- which tracks the 30 largest companies at the stock market, declined by 2.69 per cent. Meanwhile, the NGX Consumer Goods Index played the contrarian with average gain of 0.83 per cent for the week.
Most analysts expected the profit-taking trend to continue in the next few days as investors realign their portfolios in expectation of interim dividends by major banks and ahead of the third quarter results.
“In the near term, we expect profit-taking to persist, while selective buy interest is likely to emerge in fundamentally sound equities. Over the medium term, sentiment will likely be shaped by macroeconomic developments — including growth, inflation, and policy direction — as well as movements in fixed income yields, which could further influence asset allocation and reallocation decisions between equities and debt instruments,” Cordros Capital Group stated in a weekend review of the market outlook.
Analysts at Afrinvest West Africa Group stated that the bearish performance at the stock market was due to continuing repricing of risks amid rising yields in the fixed income market and cautious positioning ahead of corporate earnings releases.
“In the coming week, we expect a mixed performance with a bearish tilt as investors continue to reassess portfolio positioning amid half year 2025 interim dividend declarations, sustained pressure on blue-chip stocks, and the absence of strong positive catalysts,” Afrinvest stated.
Momentum of activities also slowed down considerably with total turnover dropping to 4.773 billion shares worth N107.426 billion in 152,965 deals compared with a total of 8.564 billion shares valued at N99.936 billion traded in 177,870 deals penultimate week.
The financial services sector remained atop the activity chart with a turnover of 3.734 billion shares valued at N60.627 billion traded in 72,977 deals, representing 78.24 per cent and 56.44 per cent of total equity turnover volume and value respectively.
SOURCE: The Nation