Stock Market sinks: N318bn lost as Bearish Sentiment holds firm

By Rukayat Adeyemi

The week opened with bearish sentiment continuing to grip the Nigerian Exchange Ltd. (NGX), as market capitalisation fell by N318 billion, or 0.54%, from N59.039 trillion to close at N58.721 trillion.

A Bearish Sentiment refers to an overall negative attitude regarding the value and future prospects of given asset.

The All-Share Index declined by 0.54% or 524.3 points, closing at 96,907.73, compared to 97,432.02 recorded on Friday.

Consequently, the Year-To-Date (YTD) return decreased to 29.60%.

The market’s downturn was driven by sell-offs in major stocks, including MTN Nigeria, Aradel, Oando, Guaranty Trust Holding Company (GTCO), FBN Holdings, and Zenith Bank, among others. The market breadth closed negatively, with 30 losers and 17 gainers on the Exchange.

Caverton led the losers’ table with a 10% decline, closing at N1.80, followed closely by Aradel, which fell by 9.99% to close at N401.10 per share. Oando Plc lost 9.98% to close at N80.70, FTN Cocoa dropped 9.90% to N1.74, and Veritas Kapital fell by 9.86% to N1.28 per share.

Conversely, John Holt and United Bank for Africa (UBA) topped the gainers’ table, each rising by 10% to close at N3.63 and N31.90 per share, respectively. Eunisell gained 9.96% to close at N6.18, Sterling Nigeria added 5.96% to N4.98, and PZ advanced by 4.55% to close at N23 per share.

Market analysis indicated a decline in trade turnover relative to the previous session, with the value of transactions decreasing by 10.15%. A total of 1.22 billion shares, valued at N14.23 billion, were exchanged in 10,386 deals, compared to 888.80 million shares valued at N15.84 billion traded in 8,803 deals during the previous week.

UBA led both volume and value on the activity chart, trading 240.76 million shares worth N7.29 billion.

In its weekly financial market review, Cowry Asset Management Ltd. noted that the market decline reflected ongoing caution among investors. The analysts indicated that many were adopting a risk-off approach amid fluctuating economic indicators, uncertain earnings outlooks, and ongoing corporate actions.

Persistent liquidity concerns and inflationary pressures have dampened investor enthusiasm, with many awaiting clearer signals regarding monetary policy and potential fiscal measures before making fresh commitments.

Looking ahead, the analysts predicted continued market volatility in the near term due to the prevailing cautious sentiment among investors. However, they suggested that positive developments, such as improved corporate earnings or stabilising macroeconomic conditions, could bolster investor confidence and support a market recovery.