Equities Slide As Profit-Taking Erodes Year-To-Date Gains

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A wave of profit‐taking sent the Nigerian equities market lower, with the NGX All‐Share Index falling by around 0.7 per cent to approximately 138,737 points on Tuesday-equivalent to a loss of nearly 0.67 per cent in market capitalisation, which dropped to about ₦87.8 trillion. The sell‐off was driven largely by pressure on heavyweight stocks such as Lafarge Africa and Transnational Corporation, while market breadth skewed negative, with far more declines than gains. Investors now face moderating Month‐to‐Date returns of –1.1 per cent, even as Year‐to‐Date gains remain robust at roughly +34.8 per cent.

Trading volumes saw a slight dip to approximately 407.6 million units across 31,406 deals, down from the previous day's 33,859 trades. Yet overall trading value surged dramatically by 169 per cent to ₦39.9 billion, propelled by heavy activity in Seplat Energy and Guaranty Trust Holding Company, the latter leading by volume with 32.6 million units traded.

The current slide comes on the heels of a remarkable July rally, when the equities market posted its strongest monthly gain of the year-16.6 per cent-lifting the NGX index close to the 140,000‐point threshold and elevating YtD returns to approximately 35.9 per cent. Market capitalisation during that period soared from ₦75.8 trillion to ₦88.4 trillion, bolstered by broad‐based advances across industrials, banking, insurance, and consumer‐goods sectors.

August continued the upward momentum, albeit at a more modest pace. The ASI climbed from around 139,864 to 140,295 points-resulting in a MoM gain of 0.3 per cent-while market capitalisation rose to ₦88.77 trillion and YtD return held at about 36.3 per cent.

Recent weeks, however, have introduced caution back into the market. Earlier this week an analyst at Cordros Capital warned that, amid continued profit‐taking and lack of fresh catalysts, sentiment was likely to remain subdued in the near term, with selective interest focused on fundamentally sound equities. InvestData Consulting echoed this, noting that although volume suggests active rotation, the prevalence of sellers signals continued wariness among investors.

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This shift reflects a broader pattern of consolidation following sharp gains earlier in the year. As of the end of August, the NGX ASI had advanced by roughly 36.31 per cent year‐to‐date, from about 102,926 to 140,295 points, with market capitalisation jumping 41.4 per cent-an increase of ₦26 trillion-fuelled by FX stability, regulatory reforms, and improved corporate performance. Analysts note that domestic liquidity, investor confidence, and fixed income yields trending lower have made equities increasingly attractive.

As sell‐offs intensify, certain blue‐chip stocks saw sharper losses-Zenith Bank fell 5.7 per cent, WAPCO 3.4 per cent, GTCO 2.1 per cent, and ETI 6.8 per cent in the past week-causing the ASI to slip about 0.5 per cent on a week‐on‐week basis to 140,285 points. Trading activity concurrently receded, with volume and value down approximately 33 per cent and 20 per cent, respectively.

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