The Nigerian stock market continued its downturn last week, marking the fourth straight week of losses. Investors saw sharp declines in key stocks as economic and political uncertainties weighed on market confidence.
Market data showed that BUA Cement led the loss with a 10% drop, followed by Transcorp (-7.8%) and GTCO (-4.6%). These declines pushed the Nigerian Exchange Limited (NGX) All-Share Index (ASI) down 0.9% week-on-week to 104,962.96 points on Friday, down from 105,955.13 points the previous week.
Declining Trading Activity
The market downturn affected trading activity, with both trading volume and value falling by 12.1% and 25.3% week-on-week, respectively.
Sectoral performance was mostly negative:
- Industrial Goods Index dropped 3.4%
- Insurance Index fell 2.9%
- Banking Index declined 2.6%
- Oil & Gas Index lost 1.1%
- Consumer Goods Index saw a marginal increase of 0.1%
The overall Month-to-Date (MTD) return declined to -2.7%, while the Year-to-Date (YTD) return remained at +2%.
Economic and Political Factors Weigh on the Market
Analysts say multiple factors are impacting investor confidence.
“The continued market volatility is due to global economic uncertainties and the ongoing political crisis in Rivers State,” analysts at Cordros Research said. “Investors are also reacting to upcoming audited earnings reports and expected dividend announcements.“
Similarly, InvestData Consulting Limited pointed to local and global concerns affecting investor sentiment.
“The events in Rivers State are creating uncertainty, pushing investors toward fixed-income markets where rates are rising,” they said. “However, these market pullbacks offer fresh buying opportunities for smart investors positioning ahead of corporate earnings releases.“
Market Outlook for the Coming Weeks
Analysts predict a mix of bargain hunting and cautious trading in the new week. Investors will be watching for Treasury Bill auction rates, corporate earnings reports, and Q1 earnings forecasts.
“We expect a mix of sentiment, with some profit-taking and portfolio reshuffling,” another commented. “More earnings reports and dividend announcements should influence market movements.“
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