Heavy losses in BUA Cement, Nigerian Breweries, Nestlé and other blue-chip stocks drag ASI down 1.05%….
Nigeria’s stock market extended its losing streak on Wednesday as sustained selling pressure across major equities wiped another N1.67 trillion from market capitalisation, with investors appearing increasingly cautious ahead of the Dangote Refinery’s highly anticipated initial public offering.
The benchmark All-Share Index, ASI, fell 1.05% to 242,223.10 points from 244,802.11 points recorded in the previous session, pushing the market to its lowest level of the week.
The decline followed Tuesday’s N1.88 trillion market-capitalisation loss, bringing the combined value erased in the two sessions to about N3.55 trillion.
The latest sell-off has also taken the ASI 5,476.68 points below Monday’s 247,699.78-point level, when the index reached a fresh high.
Heavyweight stocks were at the centre of Wednesday’s decline, with BUA Cement, Nigerian Breweries, Nestlé Nigeria, Transcorp and other major counters recording significant losses.
Market breadth remained firmly negative, although it improved from Tuesday’s extreme imbalance. Only 11 stocks closed higher, compared with 44 decliners, against Tuesday’s four gainers and 62 losers.
The renewed weakness comes just days before subscription opens for the Dangote Refinery IPO on September 14, with investors expected to continue repositioning portfolios to raise funds for the offering.
Blue-chip stocks bear the brunt
BUA Cement emerged as one of the biggest drags on the market, falling by the maximum 10% to N278.10 from N309.00.
The sell-off extended into the consumer goods space, where Nigerian Breweries dropped 9.76% to N74.00, while Nestlé Nigeria declined 6.51% to N2,800.00. Cadbury Nigeria also lost 9.94% to close at N58.45.
Transcorp declined 5.57% to N33.05, while FCMB and AccessCorp fell 4.87% and 4.16% respectively, adding to the pressure across large and mid-cap stocks.
Other major losers included FTN Cocoa, Japaul Gold, NSL Technologies and Omatek Ventures, all of which recorded 10% declines.
Despite the broad-based sell-off, some stocks managed to advance. Champion Breweries led the gainers with a 9.90% increase to N11.10, followed by VFD Group, which gained 9.52% to N11.50.
UPDC rose 5.88% to N3.60, Ikeja Hotel advanced 4.58% to N44.50, while Cutix gained 3.06% to N2.36.
The banking segment offered some relief, with Zenith Bank gaining 1.64% to N124.00, Sterling Financial Holdings rising 2.67% to N7.70 and UBA edging up 0.47% to N42.95. NGX Group also added 0.83% to close at N133.00.
Sectoral performance remains weak
All but one of the major sectoral indices recorded losses during Wednesday’s session.
The Industrial Index suffered the sharpest decline, dropping 3.10% to 9,999.13 points from 10,318.23 points.
The Insurance Index followed with a 3.07% fall to 1,043.11 points, extending its 4.38% decline recorded on Tuesday.
Consumer stocks also came under renewed pressure, with the Consumer Goods Index falling 2.09% to 4,051.24 points after gaining 0.49% in the previous session.
The Banking Index was comparatively resilient, declining 0.53% to 2,493.73 points following Tuesday’s much steeper 5.29% loss.
The Oil & Gas Index slipped 0.20% to 5,761.75 points after posting a 5.76% gain on Tuesday, while the Commodity Index remained unchanged at 1,877.46 points.
Trading activity slows
Wednesday’s sell-off was accompanied by lower trading activity, unlike the surge in transactions recorded during Tuesday’s session.
A total of 534.45 million shares changed hands, representing a 29.04% decline from the 753.17 million shares traded previously.
Market turnover also fell 19.94% to N22.28 billion, while the number of deals dropped to 46,943 from 54,051.
Sterling Financial Holdings topped the volume chart with 78.11 million shares traded, while Nestlé Nigeria recorded the highest value of transactions at N3.20 billion.
Investors weigh IPO and market opportunities
The latest decline leaves the market facing heightened volatility as investors balance existing positions with the funding requirements of the upcoming Dangote Refinery IPO.
The two-day sell-off has erased approximately N3.55 trillion in market capitalisation, pulling the market sharply lower from Monday’s N160 trillion milestone.
However, the decline in trading volume on Wednesday, despite another substantial fall in the index, could point to a slowdown in the intensity of portfolio repositioning ahead of the IPO.
The ASI nevertheless remains firmly positive on a year-to-date basis, with its return moderating to 55.66% from 57.31% on Tuesday.
Market attention is also expected to remain divided between the Dangote Refinery offer and Nigeria’s upcoming reclassification to Frontier Market status by FTSE Russell, which takes effect on September 21.
