Nigerian Stock Market Suffers N304 Billion Loss as Investors Shift to Fixed Income

This week commenced with Nigerian equities experiencing a notable downturn, as investors shifted their focus towards fixed income securities to capitalize on gains, contributing to a bearish mood in the market.

The Nigerian Exchange (NGX) witnessed an average decline of 0.53 percent in its benchmark indices, translating to a capital loss of approximately N304 billion. The All Share Index (ASI), which measures all share prices on the NGX, fell from an opening index of 102,314.56 points to close at 101,777.12 points. Correspondingly, the total market capitalization of listed equities dropped from N57.865 trillion at the start to N57.561 trillion by close.

The downturn was largely influenced by significant selloffs across various sectors, particularly among prominent banking stocks, including Guaranty Trust Holding Company (GTCO), Zenith Bank, United Bank for Africa (UBA), and Fidelity Bank.

Market performance saw 10 stocks advancing against 32 that declined. Leading the downturn, Fidelity Bank experienced a 10 percent drop to close at N9.00 per share. Jaiz Bank followed with a 9.69 percent decrease to N2.05, and RT Briscoe dipped 8.47 percent to close at 54 kobo per share. Other notable declines included GTCO falling 7.73 percent to N38.20 and Universal Insurance decreasing by 7.69 percent to 36 kobo per share.

On the flip side, UPDC led the gainers with a 10 percent increase to close at N1.43 per share. Close behind, Morison Industries rose by 9.77 percent to N2.81, and NEM Insurance appreciated by 8.90 percent to N10.40 per share. DAAR Communication and Oando also saw gains, closing higher by 7.69 percent and 6.77 percent, respectively.

Trading volume significantly declined by 55.50 percent with 326.640 million shares traded, valued at N7.169 billion across 10,777 deals. UBA was the most active, trading 42.254 million shares valued at N1.109 billion, followed by Transcorp, Access Holdings, Oando, and Fidelity Bank.

Analysts attribute the prevailing downtrend to investor realignment towards the more attractive yields in the fixed income sector. United Capital predicts continued bearish sentiment in the equities market as the allure of higher returns from fixed income investments draws more investors away from equities, favoring the safety of less volatile assets.