The Nigerian Exchange (NGX) lost about ₦1.97 trillion in market capitalisation last week as investors took profits following the equities market’s strong recent rally.
The NGX All-Share Index declined 1.6% to 243,052.74 points on Friday, down from 246,992.44 points recorded at the end of the previous week. Market capitalisation also fell 1.24%, from ₦159.558 trillion to ₦157.587 trillion.
The sell-off was broad-based, cutting across banking, insurance, consumer goods, industrial and oil and gas stocks.
The market recorded its sharpest decline on Tuesday and Wednesday, when about ₦3.57 trillion was wiped from market value over the two sessions.
Analysts attributed the decline largely to profit-taking and portfolio repositioning ahead of the Dangote Petroleum Refinery’s initial public offering (IPO), which opened for subscription on Monday.
The offer comprises 4.1 billion shares priced at ₦525 each, with a minimum subscription of 10 shares. It is expected to raise about ₦2.15 trillion, with the offer closing on October 13.
According to analysts, some investors may be selling existing holdings to raise funds for the IPO. However, they noted that the market correction does not necessarily signal a deterioration in underlying market fundamentals.
Despite the weekly losses, the NGX staged a modest recovery towards the end of the week. The market gained 0.06% on Thursday and another 0.28% on Friday as renewed buying interest emerged in selected stocks.
The market is expected to remain volatile as investors weigh further profit-taking against the potential impact of the Dangote IPO and the strength of underlying market fundamentals.
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