Nigerian Stock Market Expected To Trade Mixed, Focus on Large-Cap Stocks

The Nigerian stock market is expected to trade mixed in the near term, with investors focusing on large-cap, high-liquidity stocks that are likely to drive market direction.

The local bourse closed last week on a mildly negative note, as cautious sentiment shaped trading activities amid profit-taking and portfolio rebalancing ahead of the earnings season and a new quarter. Simply put, many investors chose to secure earlier gains rather than take fresh positions.

Looking ahead into the new week, Cowry Assets Management Limited said, “the market appears to be in a short-term correction phase as a natural cooling-off period after a strong rally. With some stocks already trading at 52-week and all-time highs, and a relatively low Money Flow Index (MFI) indicating weak inflows, investors are clearly waiting for fresh catalysts, particularly corporate earnings, to drive the next move.

“In the meantime, this phase presents selective entry opportunities, and we continue to advise investors to focus on fundamentally sound stocks with strong earnings potential.”

Imperial Asset Managers Limited stated, “In the near term, the market is expected to trade mixed, with selective interest likely concentrated in large-cap, high-liquidity stocks, which are expected to continue guiding overall market direction. Sector rotation into Oil & Gas and Insurance may provide pockets of upside, while broader market activity remains cautious.”

The equities market closed the week in the negative territory, as the NGX All-Share Index (NGX-ASI) lost by 0.12 per cent to close the week at 152,057.38 points. Similarly, the market capitalisation decreased by N156.52 billion to close at N128.969 trillion.

Investor sentiment, as measured by market breadth, closed positively, with 55 stocks gaining, 36 losing, and 55 remaining unchanged.  Zichis Agro Allied Industries led the gainers’ table, rising 60.72 per cent to close at N13.79 per share. Premier Paints followed with a gain of 60.26 per cent to close at N37.50, while John Holt went up by 59.92 per cent to close at N18.95 per share.

On the other side, Livestock Feeds led the decliners table by 11.73 per cent to close at N7.15 per share. Fidson Healthcare followed with a 9.97 per cent loss to close at N94.85, while Cadbury Nigeria declined 9.94 per cent to close at N63.00 per share.

Overall, a total of 3.950 billion shares, valued at N201.312 billion, were traded in 359,642 deals by investors on the floor of the Exchange, compared to 8.761 billion shares valued at N267.253 billion in 193,473 deals.

The Financial Services Industry led the activity chart, with 2.881 billion shares valued at N102.259 billion traded in 139,093 deals, contributing 72.94 per cent and 50.80 per cent to the total equity turnover volume and value, respectively. The ICT Industry followed with 230.539 million shares worth N45.172 billion in 52,669 deals, while the Agriculture Industry pulled a turnover of 191.927 million shares worth N6.626 billion in 16,471 deals.

Trading in the top equities, Wema Bank, Access Holdings and United Bank for Africa (UBA) accounted for 1.448 billion shares worth N43.191 billion in 28,436 deals, contributing 36.65 per cent and 21.45 per cent to the total equity turnover volume and value, respectively.