The Nigerian equities market opened the week on a negative note with the Nigerian Exchange Limited (NGX) All-Share Index (ASI) declining by 0.07%.
The ASI fell from 98,201.49 points to 98,132.15 points, while the market capitalization decreased from N55.605 trillion to N55.716 trillion.
This decline was primarily driven by significant sell-offs in key stocks, including Transcorp, Caverton Offshore Support, Neimeth, and Coronation Insurance.
In a day characterized by bearish sentiment, investors exchanged 370,646,118 shares worth N8.111 billion across 9,942 deals.
The market saw substantial declines in several stocks, with Caverton dropping from N1.50 to N1.35, a decrease of 15 kobo or 10%.
Similarly, Coronation Insurance fell from 86 kobo to 78 kobo, down by 8 kobo or 9.30%.
Transcorp experienced a notable decline, falling from N11.90 to N10.85, a drop of N1.05 or 8.82%, while Neimeth decreased from N1.96 to N1.81, losing 15 kobo or 7.65%.
Market analysts at United Capital highlighted the mixed performance expected in the equities market as investors adopt opportunistic investment strategies.
“We foresee selective buying of fundamentally strong stocks continuing into the upcoming week,” they noted. “Market activity is anticipated to rise due to ongoing banks’ recapitalization efforts, second-quarter (Q2) filings, and anticipated corporate actions in the near term.”
However, the analysts cautioned that elevated interest rates in the fixed income market could exert a negative influence on equities.
“Investors may capitalize on higher fixed income yields, which could divert fund flow from equities,” they added.
Shares of UBA, FBN Holdings, Access Holdings, Universal Insurance, and GTCO were actively traded, reflecting the cautious yet active participation of investors.
Meristem research analysts echoed a similar sentiment, suggesting that the market is likely to maintain a bearish tone throughout the week.
“Recent announcements are likely to heighten short-term uncertainty,” they stated. “While upcoming corporate earnings have the potential to bolster investor confidence, two factors could counterbalance this optimism: the attractive yields in the fixed income market and the growing uncertainty surrounding the proposed windfall tax on banks.”
The analysts concluded that, despite the potential for positive corporate earnings, the equities market is expected to close negatively by the week’s end due to these underlying concerns.