Nigeria’s Stock Market Declines By 0.15% As Investors Sell Off Equities

Nigeria’s stock market opened the week on a negative note, recording a 0.15% decline on Monday. Equities value dropped by N8 billion at the close of trading, reflecting increased sell-offs by investors.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) declined from 105,955.13 points to 105,799.17 points. Market capitalisation also fell from N66.351 trillion to N66.343 trillion.

This decline pushed the year-to-date (YtD) return down to 2.79%, raising concerns about continued bearish trends in the market.

READ ALSO: Nigeria’s Stock Market Declines As Investors Lose N366bn In One Week

Analysts Predict Market Fluctuations

Despite the market’s decline, analysts at Vetiva Research remain cautiously optimistic about a possible rebound.

“We are cautiously optimistic that bargain hunters will emerge in tomorrow’s (Tuesday) session, which may lead to a mild recovery. However, we cannot rule out the possibility of sustained selling pressure keeping the market subdued,” Vetiva analysts said.

The decline was driven by investors selling off insurance and penny stocks, despite earlier expectations of value hunting in low-priced equities.

How Inflation and Interest Rates Affect the Stock Market

United Capital analysts suggest that investor confidence may improve as they react to Nigeria’s February 2025 inflation report. The annual inflation rate moderated for the second consecutive month, dropping to 23.2% in February from 24.5% in January, according to the National Bureau of Statistics (NBS).

This decline in inflation has sparked optimism that price pressures may have peaked. However, high interest rates in the fixed-income market continue to influence investor sentiment.

“Looking forward, the equities market is expected to improve as investors react to the inflation report and position themselves ahead of the FY-2024 earnings season and possible corporate action declarations. Nevertheless, given the elevated interest rate environment, we still expect bearish sentiments to linger in the background,” United Capital analysts stated.

Major Stocks That Declined on Monday

The stock market saw losses across several major equities, particularly in the insurance sector. Among the top decliners were:

• Etranzact: Dropped from N6.50 to N5.85, losing 65 kobo (10%).
• Sunu Assurances: Fell from N5.14 to N4.63, losing 51 kobo (9.92%).
• Prestige Assurance: Declined from N1.09 to N1, shedding 9 kobo (8.26%).
• Sovereign Trust Insurance: Dropped from N1.03 to 95 kobo, losing 8 kobo (7.77%).
• Red Star Express: Fell from N5.80 to N5.35, down by 45 kobo (7.76%).

Market Activity and Trading Volume

Despite the decline, trading activity remained high. Investors exchanged 477.5 million shares worth N7.049 billion in 13,520 deals.

The most actively traded stocks included:

• Jaiz Bank
• Zenith Bank
• Sovereign Trust Insurance
• Prestige Assurance
• Fidelity Bank

What to Expect in the Coming Days

Market analysts believe the stock market could see mixed trends in the coming days. While some investors may take advantage of the dip to buy undervalued stocks, high interest rates and inflation concerns could keep bearish sentiments in play.

With the FY-2024 earnings season approaching, investors are expected to monitor corporate announcements and inflation trends before making further moves in the market.