Equities trading at the Nigerian Exchange Limited (NGX) took a downward turn on Wednesday, October 16, 2024, as the market benchmark index fell by 0.25%, closing at 98,291.53 basis points. This decline was primarily driven by losses in key stocks such as Aradel Holdings Plc, Okomu Oil Plc, and Nestlé Nigeria Plc, pushing the overall market capitalization down by N148.06 billion to settle at N59.56 trillion.
The trading session, which started the week strong, saw a dip as bearish sentiments prompted profit-taking. Aradel Holdings led the decline with a 5.85% loss, followed by a 6.86% drop in Okomu Oil and a 2.25% decrease in Nestlé Nigeria's share value. Aradel Holdings, in particular, saw a sharp drop of N208.3 billion in market value just two days after listing its shares on the NGX.
Despite the losses, the market breadth was only marginally negative, with 23 stocks declining against 22 gainers. On the bright side, some stocks performed well, including Deap Capital, UACN, Dangote Sugar, Champion Breweries, and Daar Communication. These stocks appreciated by 10%, 9.90%, 9.69%, 9.65%, and 9.26%, respectively.
However, the broader impact of sell-offs in companies like Custodian Alliance (8.98%), Okomu Oil (6.86%), and Consolidated Hallmark Holdings (6.62%) weighed heavily on the overall market.
Consumer Goods sector saw a 0.46% increase, driven by strong gains in Dangote Sugar (9.69%) and Champion Breweries (9.65%). However, the losses in Nestlé Nigeria (-2.25%) tempered the sector's overall growth.
Insurance sector recorded a 0.40% rise, supported by positive performances in NEM Insurance Plc and Custodian Alliance.
Oil and Gas sector showed marginal growth of 0.02%, with Oando Plc contributing positively to the index.
Banking sector dropped slightly by 0.04% due to sell offs in Fidelity Bank Plc, which led the volume chart with 38.21 million units traded.
Industrial Goods is sector contracted by 0.03%, with Lafarge Africa contributing to the decline.
The bearish trend significantly dampened trading activity on the NGX, as the number of deals, volume, and value of shares fell. There were 7,776 deals recorded, with a total of 257.55 million shares traded, amounting to N8.99 billion. This marked a sharp decrease in market value by 66.46% from the previous session. Fidelity Bank Plc dominated the volume chart, while Aradel Holdings Plc led in value, accounting for N3.14 billion, representing 35.01% of total market value.
The NGX equities market experienced a tough trading day as losses in major stocks like Aradel Holdings, Okomu Oil, and Nestlé Nigeria pulled the market down by 0.25%. Investors are likely to remain cautious, especially given the ongoing profit taking activities. However, strong performances in sectors like consumer goods and insurance may provide a silver lining for the market going forward.
As the market closes the month with a year to date return of +31.5%, investors will be looking for positive signals to sustain market momentum, hoping that sectors like oil and gas and consumer goods can offset the losses seen in stocks such as Aradel and Okomu Oil.