Equities Market Suffers N71bn Loss as NGX Records Downturn

The Nigerian Exchange (NGX) witnessed a sharp downturn on Thursday, losing about N71 billion in market capitalization as bearish sentiment gripped the trading floor. This development marked a reversal of recent gains, as investors resorted to profit-taking across key sectors, dampening the market’s momentum.

At the close of trading, the market capitalization of listed equities fell from ₦89.02 trillion to ₦88.95 trillion, representing a 0.08% decline. Similarly, the All-Share Index (ASI) dropped by 126.51 points to settle at 161,307.45 points compared to the previous day’s 161,433.96 points. The negative outing reflects a cautious mood among investors amid persistent macroeconomic concerns, fluctuating foreign exchange conditions, and fears of tighter monetary policies.

The loss was driven largely by price declines in heavyweight stocks within the banking, consumer goods, and industrial sectors. Top losers included Dangote Sugar, Zenith Bank, GTCO, and Lafarge Africa, which all recorded drops in share value as traders moved to secure profits following recent rallies. Conversely, some mid- and small-cap stocks such as Tantalizers, Mutual Benefits, and Sovereign Trust Insurance posted modest gains, providing slight cushioning for the day’s performance.

Market activity showed reduced enthusiasm, with the total volume of shares traded declining by nearly 12% compared to the previous session. A total of 512.67 million units valued at ₦6.84 billion were exchanged in 8,905 deals. The banking sector remained the most active, accounting for the bulk of trades, but selling pressure weighed heavily on the performance of tier-one banks.

Analysts attribute the bearish run to a combination of profit-taking and weak investor sentiment. According to market watchers, investors are adjusting portfolios in response to uncertainties surrounding inflation and interest rate trends. The Central Bank of Nigeria (CBN)’s continued monetary tightening to rein in inflation has raised yields in the fixed-income market, drawing some investors away from equities.

Despite the current downturn, experts note that the long-term outlook for the NGX remains stable, underpinned by ongoing reforms aimed at strengthening the capital market and improving transparency. They point out that the recent approval of sustainability disclosure guidelines and innovations around securities settlement cycles signal progress in positioning the NGX for global competitiveness.

For retail investors, the advice remains cautionary: focus on fundamentally sound stocks, particularly in the industrial goods and telecommunications sectors, which are expected to show resilience amid economic headwinds. Sectors linked to agriculture and energy also remain attractive, given policy shifts to support food security and energy diversification.

The recent volatility also highlights the sensitivity of the market to broader economic realities. Inflation, though easing in recent months, continues to hover at elevated levels, eroding purchasing power. Similarly, the naira has shown some stability due to increased foreign exchange inflows, but persistent pressure from import demand remains a challenge. These dynamics have collectively influenced investor confidence, as traders seek to strike a balance between risk and reward.

Institutional investors are also closely monitoring fiscal policy developments, particularly government spending priorities and borrowing patterns. The expected inflow of diaspora remittances and multilateral loans could provide support for foreign exchange liquidity, thereby boosting investor confidence in the medium term. However, until these inflows fully materialize, equities are likely to remain volatile.

In conclusion, Thursday’s N71 billion loss in market capitalization underscores the fragile balance in Nigeria’s capital market as it navigates economic and policy uncertainties. While short-term dips are likely to persist, especially amid profit-taking and monetary tightening, the long-term fundamentals remain strong. Investors are encouraged to remain strategic, focusing on value stocks with strong earnings potential, even as the broader market continues to experience fluctuations.