Nigerian investors lose N1 trillion as banking, insurance stocks trigger market rout

Nigerian investors lost N1.005 trillion in market value on Thursday, July 31, as the stock market fell for a second straight day. Banking, insurance and consumer goods stocks led the decline, with the Insurance Index suffering the steepest drop of 2.26%.

Data from the Nigerian Exchange (NGX) showed the All-Share Index (ASI) fell 0.66% to close at 245,362.26 points, down from 246,980.17 points at the previous session. Market capitalisation dropped from N159.34 trillion to N158.34 trillion.

Breadth and sector performance

Sentiment stayed negative all session. Losers outnumbered gainers by 45 to 17, giving a market breadth ratio of 0.4, a clear sign of widespread selling pressure.

The Insurance Index fell 2.26% to 1,191.15 points, the worst performer. The Banking Index shed 2.04% to 2,480.57 points, the Consumer Goods Index dropped 1.10%, and the Industrial Index lost 0.70%. Only the Oil and Gas Index closed positive, edging up 0.01%, while the Commodity Index ended flat.

HBM Nigeria, NGX Group, NASCON Allied Industries, First HoldCo and Zenith Bank were among the large and mid-cap stocks that weighed most heavily on the index.

Two-day loss exceeds N1.65 trillion

Thursday's decline followed a N648 billion loss on Wednesday, putting the market's cumulative two-day drop at more than N1.65 trillion, according to Punch reports.

Top losers included Tripple Gee & Company, down 10.00% to N2.88; Lasaco Assurance, down 9.92% to N2.18; C&I Leasing, down 9.84% to N5.50; Mutual Benefits Assurance, down 9.80% to N3.22; and Trans-Nationwide Express, down 9.03% to N2.82.

On the upside, Legend Internet gained 8.64% to N4.40, Daar Communications rose 7.32% to N1.76, Sterling Financial Holdings advanced 6.67% to N8.00, Sovereign Trust Insurance appreciated 5.73% to N2.03, and Royal Exchange added 4.69% to N1.34.

Heavy trading despite losses

Trading activity strengthened even as the market closed bearish. A total of 2.10 billion shares valued at N230.83 billion were traded in 48,231 deals.

First HoldCo led the activity chart with 1.57 billion shares worth N196.20 billion. Access Holdings traded 37.40 million shares valued at N998.51 million, Sterling Financial Holdings exchanged 36.01 million shares worth N286.80 million, Ellah Lakes recorded 34.75 million shares valued at N297.83 million, and Zenith Bank traded 33.10 million shares worth N4.03 billion.

Earlier, First HoldCo Chairman Femi Otedola increased his investment in the group after acquiring an additional 680.8 million shares through a private placement. The purchase raised his equity interest to 20.42%, with the value of his holdings estimated at about N1.05 trillion. Sources familiar with the transaction said the shares were allotted at N44 each, below the company's closing price of N61 on July 18.

Analysts at Cowry Asset Management warned the market could remain under pressure as profit-taking continues across most sectors. For Nigerian businesses and investors, this suggests a cautious second half of the year until prices find firmer support.