Investors remain distant from Nigerian Exchange Limited (NGX) which continues the bearish trend of the equities market throughout its fourth consecutive week. Market risk aversion during the week resulted in N1.4 trillion losses Year to Date which raised doubts about persistent negative sentiment in equity stock markets.
Equity markets experienced a N1.4 trillion depletion since last Friday when market capitalisation dropped to N65.819 trillion from its previous N67.193 trillion figure achieved at February 28 representing 2.1 percent decline.
The all-share index measured listed equity performance at 104,962.96 points after its 2.7 percent decrease resulted in 2,858.43 point erosion compared to 107,821.39 points on record.
Investor losses increased despite February 2025 CPI data showing that inflation was cooling down. Investors failed to react positively to the decrease in inflation which followed the previous month of declining consumer price growth.
The market drivers continued to maintain their attention towards broad economic uncertainties such as currency exchange rate turbulence and monetary policy guidance and worldwide financial volatility.
Many market participants attributed the prolonged bearish period of trading to substantial reductions in market activity. The total shares traded dropped 11.5 percent to 2.90 billion units across the week while trading activities reached N48.06 billion marking a 24.3 percent decrease.
The markets showed declining month-to-date nominally at -2.7 percent while year-to-date maintained +2 percent despite struggling to maintain consistent growth.
Analysts noted that the sharp pullback in market activity was primarily driven by cautious investor behaviour. With growing uncertainty surrounding corporate earnings releases and macroeconomic conditions, many investors opted to stay on the sidelines rather than engage in aggressive trading.
A look at sectoral performance painted a grim picture, with five of the six major indices closing in the red. The NGX consumer goods index emerged as the sole gainer, rising by a marginal 0.06 per cent week-on-week.
This modest appreciation was fueled by renewed investor interest in stocks such as Neimeth, Northern Nigeria Flour Mills (NNFM), NASCON Allied Industries, and Dangote Sugar, which recorded slight price upticks.
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In contrast, the NGX industrial index bore the brunt of the market downturn, suffering the steepest sectoral decline with a 3.39 per cent drop. The plunge was driven by heavy sell pressure on key industrial stocks such as BUA Cement, UPDCREIT and Cutix Plc, experiencing notable price depreciation.
The financial sector was not spared, as the NGX insurance index and NGX banking index posted significant declines of 2.8 per cent and 2.5 per cent respectively.
Financial stocks, including Universal Insurance, Sovereign Trust Insurance, FCMB Group, FirstBank HoldCo and AccessCorp, witnessed substantial selloffs. The bearish sentiment extended to the energy and commodities markets, with the NGX oil and gas index shedding 1.08 per cent, while the NGX commodity index declined by 0.45 per cent.
Despite the prevailing negative sentiment, analysts at Cowry Asset Management believe the market presents buying opportunities, especially for long-term investors.
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Market indicators show investors have a chance right now to enter because the market currently sells at reduced levels. The present recurring market decline has brought about conditions where dividend-yielding stocks grow more appealing because their dividends are projected to rise from lowered share prices according to the report.
Market observers expect investors to modify their strategies during the impending dividend season because trading in March is coming to a close. Capital investors and income seekers find success during this traditional period because they choose stocks that deliver sizeable dividends.Market instability continues to be a short-term risk factor.
According to analysts at Cordros Capital investors should expect additional market movement since they will process multiple corporate audit reports alongside dividend declaration statements in the upcoming week.
Market sentiment will strongly depend on these disclosed financial results because they will influence the size of the present market fixes. Foreign market trends alongside Central Bank of Nigeria policy modifications alongside economic conditions outside Nigeria will permanently impact the investors’ confidence which drives market activity.
The market volatility demands investors to conduct strategic stock selections through a conservative investment strategy.
Investors suggest that stocks displaying fundamental strength with durable earnings growth since receiving stable dividend payments will fare better throughout market disruptions.
Some investors spot the market dip as an acquisition moment but other investors maintain their caution because of macroeconomic doubts affecting Nigeria’s economic course.
Market participants closely monitor important market indicators to differentiate between brief market correction and prolonged market slowdown as the NGX stands at a threshold for decision.
