Nigerian Bourse Opens Bearish In September, Investors Lose N362.77bn, As Sell Pressure Persists
The Nigerian Exchange (NGX) began the month of September on a bearish note, extending the downtrend from the previous week as sustained profit-taking and portfolio realignment dragged the benchmark index lower. At the close of trade on Monday, the NGX All-Share Index fell by 0.41 percent to 139,722.19 basis points from 140,295.49bps recorded at the end of last week. In the same vein, market capitalization shed N362.77 billion to settle at N88.41 trillion, while the year-to-date gain moderated to 35.75 percent.
The day’s downturn was driven by a wave of selloffs across key sectors of the market, with heavyweights and mid-tier counters such as Eterna, Oando, Wapco, Honeywell Flour, UBA, Zenith Bank, Fidelity Bank, Accesscorp and Ecobank Transnational Incorporated all closing lower. In total, 32 equities ended the session in the red, compared to 15 gainers, reflecting a broadly negative investor sentiment. Sovereign Trust Insurance emerged the top gainer for the day, while Veritas Kapital, Ellah Lakes and Eterna led the losers’ table.
Meanwhile, selective demand continued to push SCOA and Julius Berger to a fresh 52-week highs of N6.59 and N38.00 respectively, underscoring the mixed performance across board.
Market activity weakened further as total transaction volume declined by 6.24 percent to 407.98 million units, compared to 435 million units recorded previously. The value of trades stood at N14.78 billion, exchanged in 33,859 deals, suggesting a slowdown in buying interest. FCMB dominated the day’s volume chart with 55.84 million units, accounting for 13.69 percent of total volume, while Accesscorp and Fidelity Bank followed with 7.83 percent and 6.41 percent respectively. On the value side, Aradel emerged the most traded stock with N5.31 billion, representing 35.91 percent of the total value exchanged, ahead of Zenith Bank and Wapco.
Across sectoral indices, sentiment remained largely bearish as all major sectors closed negative. The banking index was dragged down by losses in UBA, Zenith, Fidelity and Accesscorp, four dividend paying stocks whose half-year audited results are being eagerly awaited. The Oil and Gas index fell on the back of losses suffered by Eterna and Oando, while Industrial Goods index slipped after Wapco shed some weight. Insurance and Consumer Goods counters also closed weaker as profit-taking persisted in Honeywell Flour and others.
Outlook
Looking ahead, investors’ outlook for the Nigerian equity market remains mixed, with cautious trading expected to persist as traders continue rebalancing their portfolios in response to the weakening sentiment and broader economic realities. The prolonged selloffs in highly capitalized stocks may create attractive entry points for discerning investors willing to take medium-to-long-term positions in fundamentally sound companies, especially as the market approaches another earnings season.
Technical Viewpoint
From a technical standpoint, the NGX All-Share Index remains under short-term moving averages, indicating weakness, although the oversold conditions could trigger a rebound in coming sessions. For now, a cautious approach is advised, with preference for dividend-paying and growth-oriented stocks.
On the global commodities front, crude oil prices rebounded slightly on Monday after a period of weakness, rising more than one percent on supply concerns triggered by intensified Russia-Ukraine hostilities and a weaker United States dollar. Brent crude gained 1.2 percent to trade at $68.28 per barrel, while West Texas Intermediate climbed 1.3 percent to $64.81 per barrel. However, volumes remained thin given the U.S. public holiday. Despite the rebound, both benchmarks posted their first monthly losses in four months in August, shedding over six percent as a result of rising OPEC+ supply and fears of a potential supply glut in the fourth quarter. Investors are now turning attention to the OPEC+ meeting scheduled for September 7, as well as geopolitical developments in Beijing where President Xi Jinping, President Vladimir Putin and Prime Minister Narendra Modi are attending a key regional summit.
