Investors Book Gains as Equities Market Sheds ₦94 Billion on Profit-Taking

The Nigerian Exchange (NGX) closed the week on a negative note as investors engaged in profit-taking on major blue-chip stocks, resulting in a market capitalisation decline of ₦94 billion. The dip came after a strong run of gains recorded in previous sessions, signalling a momentary slowdown as investors moved to lock in returns amid shifting market sentiment.

Market data from the NGX showed that the All-Share Index (ASI) fell marginally by 0.24 per cent, closing at 102,715.92 basis points, while overall market capitalisation dipped from ₦58.72 trillion to ₦58.63 trillion. Analysts attributed the decline largely to selloffs in highly capitalised stocks such as MTN Nigeria, BUA Cement, and Zenith Bank.

Trading activities during the session were marked by cautious optimism as investors rebalanced their portfolios following several days of bullish momentum. Market analysts said the development was expected, noting that the market had experienced a sustained rally in previous weeks driven by improved third-quarter earnings reports and positive macroeconomic expectations.

Despite the pullback, market breadth remained relatively stable, with 29 gainers and 32 losers. Stocks such as Flour Mills of Nigeria, UBA, and Access Holdings saw profit-taking pressures, while Dangote Sugar and Geregu Power recorded modest gains that helped cushion the overall decline.

The banking and industrial goods sectors led the losers’ chart, reflecting investors’ decision to take profits in the blue-chip counters that had appreciated significantly earlier in the month. Analysts at Vetiva Capital said the moderation was consistent with investor behaviour in an overheated market and predicted a short-term correction before another rally.

Trading volume stood at 369.45 million shares valued at ₦8.14 billion, exchanged in 7,456 deals. Banking stocks dominated activity, accounting for nearly 60 per cent of the total turnover. Fidelity Bank emerged as the most traded stock by volume, followed by Access Holdings, GTCO, and UBA.

Market watchers believe the recent volatility is driven by mixed investor sentiment following new fiscal and monetary policy adjustments. The Central Bank of Nigeria’s tightening stance on liquidity, coupled with rising yields in the fixed-income market, has prompted investors to reassess their exposure to equities. Many are rotating funds into less volatile asset classes as yields on treasury bills and government bonds improve.

Financial experts also said that the slight retreat does not necessarily indicate a loss of confidence in the market but rather a natural pause after a sustained upward trend. “Investors are simply taking profits after a remarkable period of growth. The fundamentals of the equities market remain strong, supported by improved corporate earnings and reforms in the economy,” said a Lagos-based investment analyst.

Recent macroeconomic data showing a modest recovery in inflation management and better foreign-exchange liquidity have supported equities in recent months. However, uncertainties around oil prices, currency stability, and fiscal policy direction continue to influence investor decisions. Analysts predict that as the government rolls out its 2026 fiscal strategy, clarity on tax reforms, public spending, and infrastructure investment could shape market direction.

Meanwhile, foreign portfolio investors have continued to show renewed interest in Nigeria’s stock market following policy reforms by the federal government, including the unification of exchange rates and the clearing of some foreign-exchange backlogs. Nonetheless, market participants remain cautious amid global economic headwinds and geopolitical uncertainty that affect oil-dependent economies.

In the corporate space, several blue-chip companies have begun releasing their unaudited nine-month financial statements, which have largely shown resilience despite inflationary pressures and rising costs of operations. The financial sector continues to perform strongly, buoyed by higher interest income and digital expansion, while manufacturing firms are navigating cost challenges with efficiency improvements.

Despite Friday’s dip, year-to-date gains on the NGX remain positive, reflecting sustained investor confidence in the market’s long-term outlook. The index has advanced by over 30 per cent since January, largely driven by domestic investors and pension funds diversifying into equities amid an improving business environment.

Looking ahead, analysts expect market sentiment to stabilise as investors digest the latest earnings results and await policy directions from the Central Bank and the Ministry of Finance. They note that blue-chip stocks may remain under mild pressure in the near term as investors continue to rebalance portfolios, but bargain-hunting could return once prices hit attractive levels.

Retail investors have also been advised to remain patient and focus on fundamentally sound stocks with strong dividend yields. Investment advisers believe the current dip presents an opportunity to accumulate quality shares ahead of the next earnings season.

In summary, the ₦94 billion loss in market capitalisation reflects a temporary correction phase rather than a reversal of the bullish trend. The Nigerian equities market remains supported by positive corporate fundamentals, improved liquidity, and ongoing macroeconomic reforms aimed at stimulating investment and growth. As profit-taking activities subside, renewed buying interest is expected to restore market momentum in the coming sessions.