NGX extends losses to 3rd week as Banking stocks shed 3.1 percent

NIGERIA’S equities market extended its losing streak to a third consecutive week, shedding about N534 billion in market value as sell-offs in major banking stocks weighed on investor sentiment, despite gains in oil and gas shares.

The Nigerian Exchange Limited All-Share Index declined by 0.33 percent week-on-week to close at 247,539.73 points on Friday, October 16, while market capitalisation fell to N160.73 trillion from the previous week’s level.

The decline moderated the market’s year-to-date return to 59.07 percent, while the month-to-date performance stood at a negative 1.5 percent, according to Cowry Asset Management Limited’s weekly financial markets review.

The sustained weakness reflected pressure on heavyweight stocks, particularly Zenith Bank, which lost 6.5 percent during the week. First HoldCo fell by 3.9 percent, while Guaranty Trust Holding Company declined by 5.1 per cent, further weighing on the market.

MTN Nigeria Communications also shed 1.8 percent, adding to the downward pressure from major stocks.

The banking sector recorded the steepest sectoral decline, falling 3.15 percent as investors took profits in major banking counters. Losses in Zenith Bank, Guaranty Trust Holding Company and First HoldCo outweighed gains in Ecobank Transnational Incorporated and Fidelity Bank.

Insurance stocks also closed lower, with the sector declining 0.14 percent as losses in AIICO Insurance, Coronation Insurance and Mansard Insurance offset gains in some other companies.

However, the broader market showed pockets of resilience, with advancing stocks outnumbering decliners during the week. A total of 49 stocks gained, compared with 29 losers, producing a market breadth ratio of 1.69 times.

Livestock Feeds led the gainers, appreciating by 44.5 percent, followed by E-Tranzact International, which rose 43 percent. Austin Laz & Company gained 32.7 percent, while Omatek Ventures and Fortis Global Insurance advanced by 19.4 percent and 13.1 percent, respectively.

On the losing side, UPDC Real Estate Investment Trust recorded the steepest decline, falling 11.9 percent. Enamelware Industries lost 10 per cent, while NASCON Allied Industries, Trans-Nationwide Express and LivingTrust Mortgage Bank shed 9.5 percent, 9.1 per cent and 8.4 percent, respectively.

Sectoral performance was mixed, with oil and gas stocks providing the strongest support. The sector advanced 3.13 percent, driven by buying interest in Aradel Holdings and Eterna, which offset losses in Oando.

Consumer goods stocks edged up 0.09 per cent, supported by gains in Multi-Trex Integrated Foods, Guinness Nigeria and International Breweries. However, declines in NASCON Allied Industries, PZ Cussons Nigeria and Dangote Sugar Refinery limited the sector’s advance.

The industrial goods index closed flat as gains in Austin Laz & Company and Cutix were insufficient to lift the sector.

Trading activity weakened considerably during the review period, reflecting reduced participation in the market. Total trading volume declined by 38.91 percent week-on-week, while transaction value fell by 38 percent. The number of deals also dropped by 12.1 percent.

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Investors traded 1.66 billion shares valued at N160.73 billion in 184,919 deals during the week.

Looking ahead, Cowry Asset Management expects cautious trading to persist amid selling pressure and subdued market activity. However, bargain-hunting in fundamentally sound stocks and sustained interest in oil and gas and commodity-related equities could provide some support.

Market direction in the coming week is likely to depend on investor sentiment, sectoral performance, corporate earnings and broader macroeconomic developments.