Nigeria’s stock market recorded a difficult week as investors sold off shares and repositioned their portfolios ahead of the anticipated Dangote Refinery Initial Public Offering (IPO).
The bearish trend persisted throughout the week, with the market closing lower for five consecutive trading sessions. As a result, the Nigerian Exchange (NGX) All-Share Index (ASI) declined by 3.59 percent to settle at 235,941.27 points on Friday.
The downturn also wiped out a significant portion of investors’ wealth. Market capitalisation fell by N5.643 trillion, dropping to N151.327 trillion at the close of trading.
Analysts attributed the decline largely to profit-taking activities, as investors chose to cash out gains from previously profitable stocks while preparing funds for the expected Dangote Refinery share offer.
The week’s trading data reflected weak investor sentiment, with far more stocks losing value than gaining. Market breadth ended in negative territory, with only 11 stocks posting gains compared to 78 stocks that recorded losses.
Speaking on the market performance, the Managing Director and Chief Executive Officer of Globalview Capital Limited, Aruna Kebira, explained that the slowdown follows a familiar pattern often seen during the middle of the year.
According to him, the first few months of the year are usually driven by the release of annual corporate results and dividend announcements. Once dividends are paid and investors receive returns, trading activity often slows down as the market waits for the next major trigger.
Kebira noted that there is typically a gap between the end of dividend season and the release of second-quarter earnings reports, which are expected toward the end of July. During this period, uncertainty often causes investors to become more cautious.
He also pointed to growing interest in the upcoming Dangote Refinery IPO as another reason for the current market weakness. Many investors are reportedly selling existing holdings to free up cash and position themselves for what is expected to be one of the largest public offerings in Nigeria’s capital market history.
Despite the recent decline, market analysts remain cautiously optimistic about the months ahead.
Investment firm Imperial Asset Managers Limited said investors will closely monitor several factors, including half-year corporate earnings, dividend declarations, oil price movements, foreign exchange stability, and the Central Bank of Nigeria’s liquidity management policies.
The firm advised investors to focus on companies with strong fundamentals, consistent earnings, and reliable dividend records. It also suggested that the recent sell-off in quality banking stocks could create attractive buying opportunities for long-term investors.
Similarly, Futureview Limited expects investors to remain cautious while prioritising fundamentally strong stocks trading at attractive valuations. The firm urged market participants to rely on credible information and verified market updates when making investment decisions.
Among the gainers, Cornerstone Insurance emerged as the best-performing stock of the week after rising by 11.01 percent to close at N6.05 per share. Academy Press followed with an 8.72 percent gain to N8.10, while Conoil advanced by 8.25 percent to close at N210.00 per share.
On the losers’ table, International Energy Insurance recorded the sharpest decline, falling by 28.83 percent to N5.06 per share. First Holdco dropped by 20.29 percent to N55.00, while John Holt lost 17.65 percent to close at N11.20 per share.
As investors await fresh earnings reports and the highly anticipated Dangote Refinery IPO, market activity is expected to remain cautious in the near term.
