Emmanuel OchayiThe Nigerian equity market declined by 0.44% on Wednesday, marking its third straight day of losses this week. Despite impressive financial reports from many listed companies on the Nigerian Exchange Limited (NGX), the market has continued its downward trend. Several firms have announced dividend payments and bonus shares, but these have not been enough to reverse investor sentiment.
Stocks that contributed to Wednesday’s loss include Caverton, Consolidated Hallmark, Eterna, FTN Cocoa, and Linkage Assurance.
Join our WhatsApp ChannelInvestor Sentiment Shifts to Fixed-Income Market
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Analysts suggest that concerns over declining yields in the secondary market are affecting the equity market, as investors look for higher returns in the fixed-income space. According to Vetiva Research, the market may see mixed trading activity in the coming sessions as investors selectively buy stocks while seeking opportunities in bonds and other fixed-income securities.
At the close of trading on Wednesday, the NGX All-Share Index (ASI) dropped from 106,904.25 points to 106,436.48 points. The equities market capitalization also fell from N66.942 trillion to N66.653 trillion, reflecting a decline in stock values.
Top Losers in the Equity Market
Several stocks recorded significant losses on Wednesday, contributing to the market’s overall decline. Caverton experienced the biggest drop, with its share price falling from N2.80 to N2.52, representing a 10% loss.
Consolidated Hallmark also recorded a sharp decline, as its stock fell from N3.95 to N3.56, losing 9.87%. Similarly, Eterna saw its share price drop from N37.80 to N34.15, marking a 9.66% loss.
FTN Cocoa was not spared, as its stock fell from N1.68 to N1.52, representing a 9.52% decrease. Additionally, Linkage Assurance declined from N1.32 to N1.20, a 9.09% loss.
Active Trading in Banking Stocks
Despite the market decline, some banking stocks witnessed strong activity. Fidelity Bank, Access Holdings, UBA, Jaiz Bank, and Zenith Bank were among the most traded stocks on Wednesday. Investors carried out 11,423 transactions, exchanging 389.57 million shares valued at N11.31 billion.
Outlook for the Equity Market
The continued decline in the equity market suggests that investors are cautious about stock investments due to better returns in the fixed-income sector. The shift in focus may continue to impact stock prices in the coming days. However, market analysts believe that selective stock buying could bring some stability.
For now, traders are closely watching economic indicators and company earnings reports to determine future investment decisions in the equity market.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
