The Nigerian equity market closed in the red on Tuesday as the benchmark index plummeted to levels last seen in January.

The All-Share Index (ASI) dropped to 97,473.98 points, mirroring the bearish sentiment that prevailed earlier in the year.

Similarly, the market capitalization of listed stocks also experienced a sharp decline, falling to N55.132 trillion, a level reminiscent of the market’s performance in January when it reached N55.583 trillion.

This decline marks a stark reversal from the bullish trend that characterized the latter part of 2023 and spilled over into the early months of 2024.

Analysts had long anticipated a correction in the market, citing the unsustainable nature of the rally driven largely by sentiment rather than fundamental economic or market improvements.

David Adonri, a seasoned stockbroker, described the previous bullish run as sentiment-driven, noting that while the equities market had recorded impressive gains of 39.84 percent in the first quarter of 2024, it lacked substantial support from economic or market fundamentals.

Despite efforts to reignite investor interest through corporate actions and announcements, such as the Central Bank of Nigeria’s plans for a recapitalization exercise, the market struggled to maintain momentum.

Other investment avenues offering better yields further diverted attention away from equities.

The day’s trading session saw notable declines in the share prices of key players such as Dangote Sugar and PZ Cussons, both recording a 10 per cent drop, extending their stay on the losers’ chart.

The Initiates Plc, a waste management firm, also witnessed a similar decline in its share price.

Trading activities painted a gloomy picture as total deals, volume, and value all depreciated significantly compared to the previous day.

Sectoral performance reflected the overall bearish sentiment with declines observed in banking, insurance, and consumer goods indices.

While the industrial goods index saw a marginal rise, the oil and gas sector remained stable amidst the turmoil.

AccessCorp emerged as the most traded security by volume, while GTCO led in traded value, highlighting investor interest in specific stocks despite the market-wide downturn.

The Nigerian Exchange Limited (NGX) has added another financial instrument to its trading platform with the listing of the AVA Infrastructure Series 1 Fund.

Valued at N4.08 billion, this closed-end fund is a step towards addressing Nigeria’s infrastructure gaps.

The AVA Infrastructure Series 1 Fund, comprising 4,075 units, debuted on the Main Board of the NGX at a unit price of N1 million.

As a naira-denominated unit trust scheme, it presents investors with an opportunity to participate in strategic investments aimed at bolstering the country’s infrastructure sectors.

This listing, facilitated by AVA Global Asset Managers Limited, signifies a concerted effort to channel institutional capital into critical infrastructure projects.

With Nigeria facing persistent challenges in areas like power, telecommunications, and agribusiness infrastructure, the fund’s objective is to provide debt financing to support such ventures.

Efe Shaire, Managing Director of AVA Global Asset Managers, highlighted the fund’s mission to strategically allocate private financing to projects that promise stable cash flows and long-term viability.

By focusing on initiatives vital to economic and social development, the fund aims to deliver consistent and reliable income to its unit holders.

The AVA Infrastructure Series 1 Fund is part of a broader initiative to encourage innovation and investment in key sectors. It seeks to support projects that offer essential services and contribute to sustainable economic growth.

This listing comes after AVA Global Asset Managers received approval from the Securities and Exchange Commission earlier in the year for a N200 billion AVA Infrastructure Fund Programme. The successful debut of the AVA Infrastructure Series 1 Fund on the NGX platform underscores the growing interest in infrastructure investment and the potential for private capital to address Nigeria’s pressing development needs.

Investors now have the opportunity to participate in this landmark initiative, contributing to the country’s infrastructure development while potentially earning attractive returns on their investment. As Nigeria continues to prioritize infrastructure improvement, funds like AVA Infrastructure Series 1 play a crucial role in driving progress and fostering economic resilience.

The Nigerian equities market declined by 1.36% last week, largely driven by losses incurred by prominent companies like PZ Cussons and Secure Electronic Technology.

The All-Share Index depreciated to 98,233.76 points while market capitalization shed 1.35% to close the week at N55.56 trillion.

PZ Cussons, a leading consumer goods company, experienced a significant setback, plunging by 26.97%.

Similarly, Secure Electronic Technology, known for its contributions to Nigeria’s electronic security sector, saw a notable decline of 16.95%. These losses, among others, contributed to the overall bearish sentiment in the market.

On the flip side, amidst the downturn, some equities managed to buck the trend and recorded gains.

Tantalizers, a prominent fast-food chain, led the pack with a remarkable surge of 27.78%. FTN Cocoa Processors and Presco followed suit, registering gains of 20% and 15.31%, respectively.

The trading volume and value also saw an uptick compared to the previous week. Investors traded 2.187 billion shares worth N50.667 billion in 45,277 deals, reflecting increased market activity.

The financial services industry emerged as the most active sector, contributing significantly to both volume and value of trades.

The United Bank for Africa Plc, Nigerian Breweries Plc, and Access Holdings Plc emerged as the top three traded stocks, collectively accounting for a significant portion of the total equity turnover volume and value.

Their performance underscored investor interest in key players across various sectors despite the prevailing market downturn.

This decline in Nigerian equities comes amidst broader economic challenges facing the country, including inflationary pressures, currency fluctuations, and lingering effects of the COVID-19 pandemic.

Also, uncertainties surrounding global economic trends and geopolitical tensions continue to impact investor sentiment and market dynamics.

The market downturn highlights the importance of diligent risk management and strategic investment decisions in navigating volatile market conditions.

Investors are advised to exercise caution and conduct thorough research before making investment choices, especially in light of the current market environment.

“Looking ahead to the coming week, mixed sentiment is anticipated in the market as bulls and bears vie for dominance, while market players remain attuned to corporate actions in anticipation of dividend income. Despite this, pockets of gains are expected as fiscal and monetary policies strive to steer the nation’s economy towards recovery, notwithstanding the forthcoming April 2024 CPI report and Q1 2024 Nigeria’s GDP report,” Cowry Asset analysts projected.