Nigeria’s stock market recorded a 0.25% decline on Tuesday, marking its second consecutive drop this week despite the release of rebased inflation figures by the National Bureau of Statistics (NBS), which showed a lower inflation rate for January.
By the close of trading on Tuesday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) fell from its previous day’s high of 107,937.74 points to 107,670.98 points. Similarly, the market capitalization of listed stocks dropped from N67.345 trillion to N67.179 trillion. This downturn pushed the market’s year-to-date (YtD) return further down to +4.61%, reflecting the cautious sentiment among investors.
Key Drivers of the Market Decline
The decline in the stock market was largely driven by losses in key equities, including:
- Cadbury Nigeria Plc: Fell from N32 to N29.10, losing N2.90 or 9.06%
- Union Dicon Salt Plc: Dropped from N8.15 to N7.35, down 80 kobo or 9.82%
- The Initiates Plc: Declined from N4.45 to N4.01, shedding 44 kobo or 9.89%
These significant losses in the consumer goods and industrial sectors contributed to the overall market dip, overshadowing the optimism that typically accompanies lower inflation figures.
Inflation Rebase and Its Implications
The NBS reported that Nigeria’s inflation rate for January 2025 stood at 24.48%, a notable decrease from the 34.80% recorded in December 2024. This decrease is attributed to the inflation index’s rebasing, which now better reflects current consumer spending patterns and economic conditions.
According to Adeyemi Adeniran, the Federation’s Statistician-General, this recalibration accurately represents inflationary pressures and could help formulate better economic policies.
A recent report by Comercio Partners, “The Rebase Rhapsody—Nigeria’s Inflation Gets a New Wardrobe,” highlighted the significance of this move. Comercio projected that Nigeria’s inflation rate could ease to 15%- 20% by mid-2025, signaling potential relief for consumers and businesses alike.
“This recalibration could be the pivotal moment in the nation’s fight against inflationary pressures,” the report noted, emphasizing the importance of accurate data in economic planning.
Market Activity Highlights
Despite the decline, trading activity on the NGX remained vibrant, with 408,719,063 shares valued at N11.261 billion exchanged in 14,174 transactions.
Some of the most actively traded stocks included:
- Access Holdings
- United Bank for Africa (UBA)
- Guinness Nigeria Plc
- Fidelity Bank Plc
- Zenith Bank Plc
These equities saw substantial investor interest, reflecting continued engagement in the financial and consumer goods sectors.
End Note
While the stock market experienced a downturn, the rebased inflation figures provide a glimmer of hope for the Nigerian economy. Investors remain cautious, but the prospect of easing inflation by mid-year could lead to renewed confidence in the market. The coming weeks will reveal whether this recalibration will translate into sustained economic stability and positive market performance.
