Nigeria’s Stock Market Loses N231bn As Investors React To Market Trends

Nigeria’s stock market started the week on a negative note, falling by 0.34% at the close of trading on Monday, February 24. The market lost N231 billion as investors adjusted their positions ahead of key financial announcements.

At the end of trading, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) declined from 108,497.4 points to 108,126.97 points. The total market capitalization also fell from N67.614 trillion to N67.383 trillion. The decline was driven by sell-offs in major stocks, with some companies recording significant losses.

Biggest Losers in the Market

Among the worst-performing stocks, Northern Nigeria Flour Mills (NNFM) led the decline, dropping from N80.60 to N72.55. This represented a loss of N8.05 or 9.99%.

Eunisell Interlinked followed, falling from N12.05 to N10.85, representing a 9.96% decrease. UPDC REIT also recorded losses, dropping from N6.75 to N6.30, losing 45 kobo or 6.67%.

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Despite these losses, the stock market remained active, with 357,758,781 shares worth N9.211 billion exchanged in 15,914 deals. Some of the most traded stocks included Jaiz Bank, Zenith Bank, Universal Insurance, GTCO, and Access Holdings.

Analysts Predict Market Trends

Market analysts remain divided on the stock market’s future direction. According to Futureview analysts, the equities market is expected to experience mixed performance as investors focus on the upcoming FGN Bond auction and undervalued stocks.

Meristem research analysts believe the NGX-ASI could return to positive territory as investors continue to buy stocks with strong fundamentals. They predict that the market will maintain momentum, supported by investor positioning in high-value stocks.

“We project that the recent hold stance in monetary policy could provide some relief, boosting positive sentiment towards equity assets,” Meristem analysts stated.

Earnings Season and Market Sentiment

With the earnings season underway, analysts anticipate a shift in investor interest. Investors are expected to buy stocks ahead of companies’ full-year financial reports and dividend declarations.

“As the earnings season unfolds, we expect buying interest to outweigh selling pressure as investors position themselves for upcoming corporate announcements,” Meristem analysts added.

However, some investors may take profits from stocks that have recently gained value. Analysts predict that while some profit-taking may occur, the stock market is likely to close the week in positive territory.

Fixed-Income Market’s Influence

United Capital research analysts noted that the high interest rates in the fixed-income market could affect investor decisions.

“The equities market is expected to maintain its positive momentum as investors prepare for the FY-2024 earnings season and possible corporate actions. However, given the elevated interest rate environment, we still expect bearish sentiments to persist in the background,” United Capital analysts stated.

Outlook for the Week

While the stock market opened the week with losses, analysts remain optimistic about a potential recovery. Investors are closely watching the earnings season, corporate announcements, and movements in the fixed-income market for investment decisions.

As trading continues, market participants will assess whether the stock market can regain momentum or if bearish sentiments will dominate in the coming days.