The Nigerian Exchange Limited (NGX) opened the week on a bearish note as the NGX Banking Index recorded the steepest sectoral loss on Monday.
The banking sector dipped by 3.98 percent following the Central Bank of Nigeria’s (CBN) directive to commercial banks to suspend dividend payments and defer bonuses to directors and senior management.
The policy move that was aimed at strengthening banks’ capital positions in line with broader regulatory objectives triggered widespread selloffs across key banking tickers, leading the market lower despite resilience in consumer goods.
The NGX All-Share Index (ASI) declined by 0.15 percent to close at 115,258.77 basis points while market capitalisation fell by ₦109 billion to settle at ₦72.680 trillion. The pressure on banking stocks overshadowed gains in other sectors with the NGX Consumer Goods Index gaining 1.98 percent.
Meanwhile, the NGX Insurance Index and NGX Oil & Gas Index declined by 0.49 percent and 0.90 percent, respectively.
Heavily traded banking stocks included Access Holdings, United Bank for Africa (UBA), Zenith Bank, Fidelity Bank and Guaranty Trust Holding Company (GTCO), all of which saw increased sell-side activity as investors repositioned in light of the new regulatory stance.
The market recorded 22,100 deals involving 721,751,190 shares valued at ₦22.01 billion.
In addition to halting dividend disbursements, the CBN also directed banks to suspend investments in foreign subsidiaries and refrain from initiating new offshore ventures. The measures are part of the apex bank’s ongoing efforts to strengthen the resilience of the banking sector amid plans for recapitalisation.
According to research analysts at Vetiva, “While we still expect to see some downward pressure in tomorrow’s (Tuesday) market, volume flows remain healthy, with activity trending in line with rising prices, a key confirmation of institutional participation. As it stands, the ASI is in price discovery mode, and sentiment remains constructive as long as it holds above 110,000 points.”
Analysts at Futureview also projected a cautious tone for the rest of the week. “We anticipate a mixed to bearish performance in the equities market this week, driven by profit-taking activities and a shift in investor attention toward the upcoming Treasury Bills Primary Market Auction (PMA) on Wednesday,” the firm stated.
As the market adjusts to the CBN’s temporary restrictions, investor focus is expected to shift toward macroeconomic signals and policy implementation timelines, especially around the central bank’s broader banking sector reform agenda.
