Customs Street Bleeds with 0.94% Loss as Waning Sentiment Weighs on Performance – Analysts’ Views

The Nigerian equities market continued its downward trajectory this week, driven by mounting volatility that weighed heavily on stock prices. The benchmark index fell by 0.94% on a week-on-week basis, closing at 104,962.96 points, marking a persistent decline in market sentiment. Despite the release of the Consumer Price Index (CPI) report for February 2025, which indicated a second consecutive month of easing inflation, these positive macroeconomic developments failed to offset the broader bearish sentiment.

Market capitalization of listed equities shrank by 0.80%, losing N532.17 billion week-on-week, with a weakened year-to-date return of 1.98%. Investor confidence remained fragile, exacerbated by a negative market breadth of 0.68 times and a 6.15% drop in the total number of deals executed, amounting to 57,043 transactions.

Sector Performance and Investor Reactions

The sectoral performance reflected the overall bearish tone, with five out of six major sectoral indices closing in the red. The NGX Industrial Index suffered the most significant losses, declining by 3.39%, driven by heavy sell-offs in stocks such as BUA Cement and UPDCREIT. The NGX Insurance and NGX Banking Indices also recorded substantial losses of 2.87% and 2.55%, respectively, with investors offloading financial stocks like FCMB Group, First Bank Holdings, and AccessCorp.

The NGX Consumer Goods Index, however, showed a marginal gain of 0.06%, buoyed by price increases in stocks like Neimeth, NNFM, and Dangote Sugar.

Outperformance and Declining Stocks

Amidst the broad market losses, a few stocks outperformed, offering positive returns to investors. Neimeth International Pharmaceuticals led the pack, appreciating by 20.5%, followed by Linkage Assurance with a 13.5% gain. Conversely, stocks like ETranzact International, which lost 26.2%, and Livestock Feeds, which dropped 17.5%, saw considerable declines as investors pulled out to minimize losses.

Analysts’ Views and Market Outlook

Analysts are now cautioning investors about the market’s current oversold state, which may present buying opportunities, particularly in dividend-paying stocks. The recent price corrections have made such stocks more attractive, with the potential for improved yields.

As we approach the final trading week of March, analysts expect continued market corrections and portfolio rebalancing, influenced by corporate earnings reports and macroeconomic data. The direction of the market will likely depend on global financial markets, Central Bank of Nigeria (CBN) monetary policy decisions, and investor sentiment toward Nigeria’s economic outlook. In light of these developments, experts advise focusing on stocks with strong fundamentals, as they are likely to weather the current market turbulence better.

The market remains cautious, and investors are advised to stay alert and selective, particularly with an eye on upcoming dividend season opportunities.