The Nigerian Exchange Limited (NGX) closed last week on a bearish note, breaking its four-week bullish streak, as investors’ wealth declined by N202 billion. This downturn followed the Central Bank of Nigeria’s (CBN) decision to hold the Monetary Policy Rate (MPR) steady at 7.5 per cent, a move that triggered caution and portfolio rebalancing among investors.
Market capitalisation of listed equities dropped from N68.963 trillion on Friday, May 16, 2025, to N68.751 trillion on Friday, May 23, 2025—reflecting a 0.3 per cent decline. Similarly, the All-Share Index (ASI), which tracks overall market performance, fell from 109,710.37 points to 109,028.62 points, representing a 0.6 per cent week-on-week loss.
The dip in investor sentiment was largely driven by sell-offs in banking and energy stocks, following the 300th Monetary Policy Committee (MPC) meeting of the CBN where all key policy rates were retained. Investors responded by shifting portfolios and locking in profits, particularly in sectors sensitive to interest rate changes.
Further compounding the market downturn was the listing of 34.2 billion new ordinary shares from United Bank for Africa (UBA) Plc’s Rights Issue. The expanded share float led to a notional dilution in market value, with estimates placing the market impact at around N201.4 billion, nearly the entire size of the week’s wealth reduction.
Despite the overall negative tone, trading activity surged, suggesting that investors remain engaged. Weekly trade volume jumped by 50.8 per cent to 3.92 billion units, while the number of deals rose 35.7 per cent to 105,012 transactions. The total trade value increased by 17.2 per cent, reaching N74.61 billion—pointing to continued market participation despite profit-taking and strategic exits.
Year-to-date (YTD) returns on the ASI moderated to 5.93 per cent, although the broader market breadth stayed positive. Fifty-two stocks posted gains, outpacing 41 decliners, indicating that pockets of strength remain even amid overall weakness.
Sector-wise, the consumer goods index led gainers with a 2.2 per cent rise, driven by renewed investor interest in heavyweights such as Nestlé Nigeria, Guinness Nigeria, Tantalizers, and Ikeja Hotel. The insurance index also gained 0.73 per cent, buoyed by improved sentiment in Custodian Investment, Regal Insurance, Tripple Gee, Cutix, and Linkage Assurance. Meanwhile, the industrial goods index added 0.72 per cent, supported by select blue-chip performances.
In terms of sector contribution, the financial services sector remained the most active, accounting for 61.2 per cent of total traded volume and 43.1 per cent of total value. A total of 2.405 billion shares worth N32.271 billion were exchanged across 44,570 deals within the sector, underscoring its critical role in market liquidity and investor focus.
In contrast, the oil and gas sector suffered the most, with the NGX Oil & Gas Index declining by 3.4 per cent, followed by a 1.52 per cent dip in the NGX Banking Index, and a 0.75 per cent fall in the NGX Commodity Index. These losses were tied to major sell-offs in Fidelity Bank, AccessCorp, Aradel Holdings, and Wema Bank.
Comparing week-on-week performance, market turnover showed a notable 51 per cent jump in trading volume, up from 2.606 billion shares valued at N63.8 billion in 77,593 deals the week before. This uptick, despite the market pullback, reflects active repositioning by investors amidst macroeconomic uncertainty.
Analysts believe the bearish sentiment may persist in the short term, particularly as macroeconomic signals remain mixed. However, pockets of value are expected to continue attracting interest, especially in sectors benefiting from stable earnings, improved fundamentals, or dividend expectations.
The NGX’s performance in the coming weeks will likely be shaped by investor reactions to fiscal and monetary policy signals, corporate earnings reports, and global market cues.
