Emmanuel OchayiThe Nigerian equity market recorded a significant loss on Tuesday, shedding N284 billion as the All-Share Index (ASI) fell by 0.44%. The market decline was driven by major losses in key stocks, including MRS, Red Star Express, Learn Africa, and Veritas Kapital.
Speaking on the development, a stockbroker, Adamu Lawal, said, “Investors are actively selling off shares in specific stocks to book profits. This activity disrupted what many analysts expected to be a positive trading session following the market’s strong start earlier this week.”
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MRS recorded the highest loss of the day, dropping from N180.90 to N162.90, a decrease of N18 or 9.95%. Red Star Express followed closely, falling from N5.05 to N4.55, a loss of 50 kobo or 9.90%. Learn Africa also experienced a notable drop, declining from N4.99 to N4.50, losing 49 kobo or 9.82%.
Commenting on these losses, a trader, Sarah Okafor, stated, “This trend shows how sensitive the equity market is to profit-taking. When a few big stocks lose value, it significantly impacts the overall market.”
Despite the losses, trading activity remained robust. Investors exchanged 542,229,692 shares in 15,561 deals, with a total value of N13.636 billion. Banks, including Access Holdings, Sterling Bank, Zenith Bank, UBA, and FCMB Group, remained the most actively traded stocks during the session.
Analysts Weigh in on Future Trends in the Equity Market
Ahead of Tuesday’s session, analysts at Vetiva Research had expressed optimism about the market’s direction. They had anticipated bullish trading, particularly in banking stocks.
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“We expect investors to keep a close eye on corporate earnings releases for guidance on the market,” Vetiva Research analysts said. “As these results come in, we anticipate another round of bullish trading, especially with banks leading the way.”
However, the market failed to align with these expectations due to the profit-taking activities that overshadowed the session.
Year-to-Date Performance and Market Outlook
Despite Tuesday’s 0.44% decline, the equity market has still posted a 1% gain for the year. The Nigerian Exchange Limited’s (NGX) ASI dropped from 104,418.94 points to 103,958.75 points. Similarly, the market capitalisation decreased from N64.440 trillion to N64.156 trillion.
Addressing the market’s year-to-date performance, portfolio manager Emmanuel Adekunle said, “While the equity market has been resilient, profit-taking by investors often leads to temporary declines. The market will likely rebound as corporate earnings reports are released.”
Investors Eye Earnings Reports for Market Guidance
The equity market’s trajectory this week will largely depend on upcoming corporate earnings reports. Many investors are closely monitoring these releases to guide their trading decisions.
Another analyst, Grace Chukwu, emphasised the importance of earnings reports, saying, “Corporate earnings provide crucial insights into the health of listed companies. Investors will act based on whether these results meet or exceed expectations.”
As of this week, the equity market had risen by 0.35% before Tuesday’s dip. Analysts remain cautiously optimistic about the market’s recovery in the coming sessions.
The equity market’s movements continue to highlight the importance of investor sentiment and corporate performance in shaping trading activities. Whether the market rebounds or continues to fluctuate will depend on how investors respond to forthcoming data.
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.
