The Nigerian stock market slipped about 1.3% in the first half of October, with the NGX All-Share Index (ASI) falling from 250,667.86 on 5 October to 247,313.94 on 19 October, according to daily market summaries from Mansa Markets.
What happened
Market capitalisation fell from ₦162.75 trillion to ₦160.58 trillion over the same period, a loss of about ₦2.2 trillion. The decline was a steady slide rather than a sharp sell-off. The index lost 0.32% on 6 October and 0.82% on 9 October, the biggest daily drop in the stretch, and then moved in a narrow band of between 247,300 and 247,800 points for the rest of the period. Aradel Holdings fell by the 10% daily limit to ₦1,377 on 9 October.
The Nigerian Exchange’s weekly report for the week ended 9 October showed that 24 equities appreciated in price, compared with 44 the week before. Daily breadth has since been balanced, with about as many stocks rising as falling on most days.
Why it matters
The dip comes against a strong year. Finance Minister Taiwo Oyedele said at a briefing on the sidelines of the IMF and World Bank meetings in Bangkok that the Nigerian market had gained 59% this year, while Indonesia’s was down about 40%, according to figures cited at the briefing.
The market is also highly concentrated. ThisDay reported that 11 companies accounted for ₦122.56 trillion, or 75.14%, of the market’s ₦163.105 trillion value at the end of September. Airtel Africa was the largest at ₦23.68 trillion, followed by Dangote Cement at ₦17.99 trillion and MTN Nigeria at ₦17.57 trillion. A Nairametrics analysis found that major shareholders of ten of the largest stocks held about 46% of the exchange’s market value at the end of July. With so much value in a few names, moves in those stocks can mask what is happening in the rest of the market.
Macro conditions remain supportive. The Central Bank of Nigeria cut its policy rate to 23% from 26.5% on 22 September, and gross external reserves stood at $55.25 billion on 18 September, the highest in 18 years according to the central bank’s Monetary Policy Committee.
What to watch
The biggest event on the horizon is the Dangote Refinery listing. The initial public offering of 4.1 billion shares at ₦525 each has been extended to 27 October, with returns due to be collated on 3 November and a listing on the exchange expected in November. At the offer price, the refinery would be valued at about ₦65.2 trillion after the offer, according to Nairametrics, far above Airtel Africa, today’s most valuable listed company. Global rate moves matter too, with the US Federal Reserve meeting on 27 and 28 October.
Related on Radarr:
- Nigerian Stocks Lose ₦468.6bn as Banks Lead Sell-Off
- Dangote Refinery IPO: Can Ordinary Nigerians Share in Its Growth?
- Dangote Refinery Extends IPO to Attract More African Investors
Sources: Mansa Markets, 19 October; Mansa Markets, 5 October; NGX weekly report, 9 October; Arise News; Rio Times, citing ThisDay and Nairametrics; Nairametrics; Blueprint.
