Investors on the Nigerian Exchange Limited (NGX) faced significant losses last week, with the market shedding a total of N847 billion due to the negative impact of profit-taking and selloffs.
The market capitalisation, which measures the total value of investments on the Exchange, fell from N55.978 trillion in the previous week to N55.131 trillion by the close of trading on Friday.
The NGX All Share Index (ASI), a key market indicator, also declined by 1.5%, ending the week at 97,100.31 points, down from 98,592.12 points the previous week.
The widespread profit-taking across major market sectors contributed to the drop, although it also created opportunities for investors to purchase value stocks at discounted prices.
In the corporate sector, several companies, including FBN Holdings, notified the Exchange of their upcoming Annual General Meetings (AGMs), while Airtel Africa continued to provide updates on its ongoing share buyback program.
Market analysts noted that despite the bearish trend, it remains prudent for investors to focus on companies with consistent dividend payments, strong fundamentals, and growth potential.
These attributes are likely to support further earnings growth and provide resilience across various market cycles.
Month-to-Date (MTD) and Year-to-Date (YTD) returns showed a slight moderation, with MTD returns at -0.7% and YTD returns still positive at +29.9%. Trading activity levels also declined, with trading volume down by 24.1% and trading value dropping by 1.4% week-on-week (W/W).
Sectoral performance was mixed, with the Oil & Gas Index rising by 5.3%, the Insurance Index up by 0.8%, and the Consumer Goods Index increasing by 0.4%. In contrast, the Industrial Goods Index and the Banking Index fell by 5.2% and 2.3%, respectively.
Looking ahead, analysts at Cordros Research predict that bearish sentiments are likely to persist as investors remain cautious amid macroeconomic uncertainties and upcoming corporate earnings announcements.
These factors are expected to play a significant role in shaping investor sentiment in the near term.