Market News

•  By : Helen Oji

A sharp wave of selloffs ahead of the Easter holiday, coupled with an unprecedented surge in Nigeria’s latest inflation report, dampened investor sentiment and dragged the stock market into a negative position.

The market capitalisation of listed equities slid by N207.1 billion as a result, reflecting the broader mood of caution that swept through the Nigerian Exchange over the four-session trading week.

Volatility gripped the market, with widespread sell pressure in the financial services sector weighing heavily on performance. The benchmark All-Share Index (ASI) declined by 0.3 per cent on a week-on-week basis, settling at 104,233.81 points.

This dip mirrored a general trend of sector rotation and profit-taking, especially in weaker counters, as investors sought to reposition amid fresh macroeconomic signals and the approaching holiday lull.

What particularly unnerved market participants was the March 2025 inflation report, which reversed the disinflation trend seen in the prior two months. Recall that headline inflation spiked to 24.23 per cent, prompting a reassessment of the macroeconomic trajectory and its likely implications for consumer demand and company earnings.

The simultaneous 0.3 per cent drop in total market capitalisation to N65.49 trillion underscored the scale of the downturn, with the erosion of N207.1 billion in market value capturing the week’s cautious sentiment. Bulls and bears split the week evenly, each dominating two sessions, as the year-to-date return moderated to 1.27 per cent.

The start of earnings season introduced another layer to the market narrative. Corporations like Access Holdings Plc began releasing audited full-year 2024 results, while a few others rolled out their Q1 2025 performance updates.

Dividend announcements remained largely encouraging, with several companies also declaring closed periods and schedules for their annual general meetings. Despite these developments, market breadth leaned decisively bearish, with declining 44 stocks far outnumbering 31 gainers, pushing the sentiment gauge to 0.71x. Trading activity followed suit, slumping across the board. Weekly volume dropped by 27.1 per cent to 1.52 billion units.

The total value of transactions fell by 18.8 per cent to N43.01 billion while the number of executed deals slipped by 20.8 per cent to 51,156.

A look at the sectoral index showed a mixed performance. While two sectors advanced, two declined, and the remaining two were flat due to subdued investor interest. The NGX Banking and NGX Insurance indices posted the steepest losses, falling by 5.43 per cent and 2.34 per cent respectively, dragged by poor performances in bellwether names such as GTCO, Zenith Bank, UBA, International Energy Insurance, and Mutual Benefits Assurance.

the flip side, the NGX consumer goods and NGX oil and gas indices managed modest gains of 2.4 per cent and 0.2 per cent, helped by investor interest in Nigerian Breweries, Livestock Feeds, Unilever, Oando and Eterna.

Meanwhile, the NGX industrial and NGX commodities indices remained largely unchanged as investors adopted a cautious stance, awaiting more clarity from upcoming Q1 2025 unaudited earnings reports.

Analysts have projected a mixed outlook for the Nigerian equities market in the week ahead, as investors continue to weigh global economic uncertainties against domestic corporate fundamentals.

Cordros Capital noted that broader market sentiment is likely to remain cautious, particularly in the face of persisting global trade tensions and their potential to dampen risk appetite. However, they pointed out that the commencement of the Q1 2025 earnings season could stimulate selective buying among investors tracking corporate performance.

Similarly, Cowry Asset Management expressed a cautiously optimistic view, stating that the ongoing dividend season and the unveiling of Q1 results may rekindle investor interest and spark a short-term rally.

Nevertheless, they urged market participants to remain focused on blue chips, given the prevailing macroeconomic headwinds.