On Tuesday, the Nigerian stock market had a significant setback when the Nigerian Exchange Limited (NGX) closed in the red, wiping N1.334 trillion in market capitalization. Heavy sell-offs in 38 other stocks as well as Dangote Cement Plc caused the drop.
The AllShare Index fell by 2,109 points, a 1.46 per cent fall, bringing it to 142,613.47 points. As a result, the total market capitalization fell to N90.227 trillion, so canceling earlier profits seen at the start of the week.
Losses were especially caused by price drops in large and mid-cap companies, including Dangote Cement, CAP, Zenith Bank, Nigerian Exchange Group, and NASCON Allied Industries. Heightened investor profit-taking seeking to lock in recent earnings was cited by analysts as the reason for the negative trend.
Afrinvest Limited predicted that the downturn might continue, noting continuous profit-taking as the main engine. Moreover observing that wary investor mood will probably put pressure not just on largecap stocks but also might spread to mid- and small-cap sectors, Vetiva Dealings and Brokerage also noted. Nevertheless, they said that such changes could offer investors chances to purchase into fundamentally solid companies at lower costs.
The News Chronicle notes that some stocks managed to defy the trend despite the widespread selloffs. With a 9.95% rise to finish at N35.90, Nigerian Enamelware headed the list of gainers. DAAR Communications came next with a 9.82 percent gain, followed by Deep Capital Management with 9.6%. Academy Press and International Breweries also saw significant increases, therefore highlighting focused investor interest in specialized markets.
Conversely, Royal Exchange headed the losers’ chart, dropping 10 percent to N2.52. A significant drag on market performance, Dangote Cement fell 9.88 percent to N520. R.T. Briscoe, Jaiz Bank, Wapic Insurance, and Lasaco Assurance also had severe losses of roughly 10%.
Trading volume fell 10.4% to 1.027 billion units, valued at N17.664 billion, throughout 34,352 transactions, thus slowing down activity. With 130.22 million shares, Universal Insurance topped the list of most traded stock; AIICO Insurance, Mutual Benefits Insurance, Prestige Assurance, and Regency Alliance Insurance came next.
The current recession highlights investor prudence, yet market experts think undervalued equities provide chances for deliberate entry.
