Uncertainty surrounding Nigeria’s rebased Consumer Price Index (CPI) report and shifts in monetary policy intervention triggered a wave of sell-offs across multiple sectors on the Nigerian Exchange Limited (NGX) last week.
Despite a 0.4 percent rise in the All-Share Index (ASI), which edged up from 107,937.74 to 108,497.4 points, the market’s performance fell short of expectations.
Market capitalization added N95 billion to close at N67.614 trillion, a decline compared to the N883.5 billion gain recorded in the preceding week.
The steep 89 percent drop in market gains showed investor caution as traders reassessed portfolio positioning amid macroeconomic developments.
Trading activity remained weak throughout the week. Market turnover contracted with total weekly traded volume declining by 17.1 percent to two billion units across 70,853 deals while total trade value dipped 10.9 percent to N49.89 billion.
These figures reflect reduced investor participation as concerns over inflation trends and monetary policy direction weighed on decision-making.
Sectoral Performance Mixed as Consumer Goods Lead Gains
Performance across key indices showed a mixed outcome, with three sectors closing in positive territory while three ended in the red. The NGX Consumer Goods Index emerged as the best-performing sector, surging 6.6 percent week-on-week, buoyed by notable gains in BUA Foods (+11.9 percent) and Dangote Sugar (+15 percent).
The NGX Insurance Index and the NGX Industrial Index also recorded marginal gains of 1.47 percent and 0.05 percent, respectively.
Conversely, sell-offs in banking and oil-related stocks contributed to declines in other key indices, as investors recalibrated positions in response to shifting monetary dynamics.
Market Activity Sees Decline in Volume and Value
A total of two billion shares valued at N49.5 billion were exchanged during the week, reflecting a decline from the 2.4 billion shares worth N55.512 billion recorded in the previous week.
The financial services sector remained the most active, accounting for 1.199 billion shares valued at N26.3 billion across 30,527 deals, contributing 59.9 percent of total volume and 53.2 percent of total value.
The agriculture sector followed, with 234.002 million shares worth N1.7 billion traded across 3,191 deals, while the consumer goods industry ranked third with 173.8 million shares valued at N7.2 billion in 8,903 deals.
Among the most actively traded stocks, Access Holdings Plc, Ellah Lakes Plc, and Fidelity Bank Plc led the volume charts, contributing 618.543 million shares worth N11.207 billion across 7,159 deals, representing 30.9 percent of total equity turnover.
Outlook: Market Eyes CPI Data and Q4 Earnings Reports
Analysts anticipate that market sentiment will remain mixed in the coming sessions as investors closely monitor macroeconomic indicators, particularly the impact of the rebased CPI data and the Central Bank of Nigeria’s (CBN) policy stance on interest rates.
Cowry Asset Management Limited projects that corporate earnings releases and dividend announcements will play a crucial role in shaping investor sentiment.
Also, Cordros Capital highlighted that upcoming Q4 2024 GDP reports and the financial disclosures of major firms such as Dangote Cement, WAPCO, and BUA Cement could influence trading activity in the weeks ahead.
Market participants are expected to maintain a cautious approach, weighing the impact of monetary policy decisions and fixed-income market movements on equities. While some fund inflows into select stocks are anticipated, analysts advise investors to focus on fundamentally strong equities with resilient growth prospects amid the evolving macroeconomic landscape.
