Investors eye Q3 earnings as NGX turnover hits N158.29bn

• Analysts anticipate renewed buying interest

INVESTORS are expected to return to selective buying on the Nigerian Exchange Limited (NGX) as third-quarter earnings announcements approach, with analysts anticipating that corporate financial results will increasingly determine stock valuations following recent profit-taking.

Mobifoluwa Adesina, Research Analyst at CSL Stockbrokers Limited, said investors were locking in gains from September rally but anticipated renewed buying interest as market participants positioned for third-quarter earnings releases across the market and outstanding half-year results from banks.

The outlook comes as equity turnover value rose to N158.29 billion in the first full trading week of October, from N155.02 billion in the preceding week, despite a decline in trading volume and a 0.97 percent weekly drop in the NGX All-Share Index (ASI).

The benchmark index closed the week at 248,363.55 points, while market capitalisation stood at N161.26 trillion. Despite the correction, the market retained a year-to-date return of 59.60 per cent, underscoring the substantial gains accumulated by investors since the beginning of 2026.

The combination of higher turnover value and a declining benchmark index suggests that investors were repositioning their portfolios amid profit-taking and expectations of fresh corporate earnings disclosures.

Trading volume fell to 2.715 billion shares from 3.166 billion shares in the previous week, while the number of deals increased by 1.61 percent to 209,986 from 206,662.

The increase in transaction value, despite lower volume, indicates a change in the composition of trading activity, although the figures alone do not establish whether investors were accumulating or disposing of particular stocks.

Adesina said: “The market witnessed some profit-taking during the week as investors locked in gains from September. However, we expect buying interest to continue as investors begin positioning ahead of third-quarter earnings releases across the broader market and half-year financial results from banks yet to report. 

ALSO READ: Atiku calls for transparency in INEC operations ahead of 2027 polls

The analyst’s outlook places corporate earnings at the centre of near-term market direction, particularly as investors assess whether listed companies can sustain earnings growth and justify their prevailing valuations following the strong appreciation recorded this year.

The financial services sector remained the dominant force in market activity during the week, accounting for 2.005 billion shares valued at N82.924 billion in 94,483 deals.

The sector represented 73.84 per cent of total equity turnover volume and 52.39 per cent of turnover value, highlighting the continued concentration of trading activity in financial stocks.

The consumer goods industry followed with 152.345 million shares worth N11.425 billion traded in 20,926 deals, while the information and communications technology sector recorded 117.296 million shares valued at N15.256 billion across 22,556 deals.

Access Holdings Plc, Zenith Bank Plc and United Bank for Africa Plc were the three most actively traded equities by volume. Together, they accounted for 1.020 billion shares valued at N50.520 billion in 29,382 deals, representing 37.56 per cent of total equity turnover volume and 31.92 per cent of turnover value.

The concentration of activity in these banking stocks reinforces the importance of financial-sector earnings to the market’s immediate outlook, particularly as investors await outstanding half-year results and assess the implications of banks’ financial performance for valuations.

However, the broader market reflected increasing selling pressure, with 54 equities declining during the week, compared with 37 in the preceding week. The number of gainers fell to 24 from 44, while 68 equities closed unchanged.

Livestock Feeds Plc led the gainers with a 47.75 per cent appreciation, followed by Tripple Gee and Company Plc, which rose 32.62 per cent, and Guinea Insurance Plc, up 29.17 per cent. Learn Africa Plc advanced 19.61 per cent, while Multi-Trex Integrated Foods Plc gained 16.67 per cent.

The sharp advances in these stocks contrasted with the wider market’s negative breadth, suggesting that gains were concentrated in a relatively small number of equities rather than reflecting a broad-based recovery.

Sectoral performance was similarly weak, although the NGX Industrial Goods Index recorded a marginal gain of 0.02 per cent.

Nevertheless, the market’s longer-term performance remained strong, with the NGX Oil and Gas Index returning 124.92 per cent year-to-date, the NGX Premium Index gaining 102.66 per cent and the NGX Industrial Goods Index appreciating 83.96 per cent.

These substantial gains underscore the importance of earnings quality and valuation discipline as investors weigh the prospects of further appreciation against the possibility of additional profit-taking.

Outside equities, activity improved across the Exchange-Traded Products (ETPs) and bond segments.

ETP transaction value increased by 81.16 per cent to N687.314 million from N379.449 million, while units traded rose to 1.831 million from 1.684 million. The number of deals also increased to 5,413 from 4,327.

In the bond market, 144,034 units valued at N146.416 million changed hands, compared with 81,063 units worth N85.606 million in the preceding week. Transaction value rose by 71.03 per cent, while the number of deals remained unchanged at 48.

The Exchange also admitted Federal Government of Nigeria Savings Bonds issued in September 2026 and supplementary-listed 6.307 billion ordinary shares of Guinea Insurance Plc during the week.

As investors enter the new trading week, attention is expected to shift towards corporate earnings, particularly results that could help distinguish fundamentally strong companies from stocks whose prices have risen ahead of underlying financial performance.

While the Friday recovery offered some relief after four consecutive sessions of losses, the broader weekly decline and deterioration in market breadth indicate that investor sentiment remains selective.

The direction of the market will therefore depend increasingly on whether upcoming earnings announcements provide sufficient justification for prevailing valuations and encourage investors to resume buying after the recent round of profit-taking.