The Nigerian Exchange Limited (NGX) extended its losing streak for a third consecutive trading session on Friday, with investors losing a staggering N1.65 trillion in market capitalization over the past two days. The sustained sell-offs pushed the All-Share Index (ASI) down by 2.3% to close at 42,000 points, its lowest level in two weeks.
Market Capitalization Plunges
The total market capitalization of listed equities on the NGX dropped from N22.4 trillion at the start of the week to N20.75 trillion by the close of Friday, representing a decline of N1.65 trillion. The losses were driven by heavy profit-taking in banking, consumer goods, and industrial stocks. Major companies like Dangote Cement, MTN Nigeria, and Guaranty Trust Holding Company saw their share prices fall by 3% to 5% during the two-day period.
Sectoral Performance
All five major sector indices recorded losses. The banking index fell by 3.5%, the consumer goods index dropped by 2.8%, and the industrial goods index declined by 2.1%. The oil and gas index lost 1.9%, while the insurance index shed 1.2%. Analysts attributed the broad-based sell-off to investors rebalancing their portfolios ahead of the upcoming earnings season and concerns over rising inflation.
Analyst Commentary
According to the Managing Director of APT Securities and Funds Limited, Mr. Garba Kurfi, 'The market is experiencing a correction after the recent rally that saw the ASI gain over 8% in June. Many investors are locking in profits, but the fundamentals remain strong.' He added that the sell-off was exacerbated by foreign portfolio outflows as global interest rates rise.
Trading Activity
Despite the price losses, trading volume increased by 12% on Friday, with 300 million shares worth N4.5 billion exchanged. However, the number of gainers was dwarfed by losers, with 35 stocks advancing against 55 decliners. Notable decliners included Nestle Nigeria, which fell by 4.9%, and Stanbic IBTC Holdings, which shed 3.7%.
Outlook
Market analysts expect the bearish trend to continue in the short term as investors wait for clarity on monetary policy direction and corporate earnings reports. The NGX has lost 1.8% year-to-date, but the long-term outlook remains positive due to strong economic recovery and renewed investor confidence in the equities market.
