The Nigerian equities market reversed its bullish run last week, as widespread profit-taking triggered heavy sell-offs and wiped about ₦1.9 trillion from investors’ wealth.
The decline came after investors recorded a ₦3.73 trillion gain on the Nigerian Exchange Limited (NGX) in the penultimate week, as the market’s strong rally prompted investors to lock in profits.
Selling pressure last week cut across the banking, industrial goods, consumer goods, oil and gas and insurance sectors, with several highly liquid stocks that had driven the earlier rally also coming under pressure.
Consequently, NGX market capitalisation fell to ₦157.587 trillion, from the previous week’s reported ₦259.558 trillion.
The NGX All-Share Index (ASI), another key market performance indicator, also declined by 1.6 per cent, closing at 243,052.74 points, compared with 246,992.44 points in the penultimate week.
Trading activity across equities, bonds and exchange-traded products (ETPs) closed the week at approximately ₦130.73 billion.
Market analysts said the broad-based nature of the sell-off suggested that investors were reducing exposure to risk rather than responding solely to company-specific developments.
They noted that investors appeared to be locking in gains following the market’s strong year-to-date performance, while the deterioration in market breadth reinforced the bearish sentiment.
According to the analysts, only a limited number of stocks attracted buying interest, while losses spread across several segments of the exchange.
The market correction also coincided with increased portfolio repositioning ahead of the Dangote Refinery Initial Public Offering (IPO), which is scheduled to open for public subscription on September 14, 2026.
Analysts said the offer could become a major liquidity event for the domestic capital market, as investors seeking to participate may raise funds by trimming existing holdings.
This could place additional selling pressure on stocks that have recorded significant gains during the market’s recent rally.
Commenting on the market outlook, analysts at InvestData Consulting Limited said the Dangote Refinery IPO could influence investor positioning in the near term.
“The Dangote Refinery IPO adds another layer to the liquidity outlook. Investors looking to participate in the offer may reallocate funds from existing holdings, creating additional pressure on stocks with weaker near-term catalysts,” the analysts said.
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They added that the impact could become more visible as the subscription date approaches.
Despite the sharp decline, InvestData said the correction did not necessarily indicate a fundamental deterioration in the Nigerian equities market.
“Corporate earnings, domestic liquidity and improved investor participation remain important medium-term drivers,” the analysts said.
They projected continued volatility on the NGX in the near term as investors weigh profit-taking against the underlying fundamentals of the market.
“The upcoming Dangote Refinery IPO could remain an important source of portfolio repositioning, while movements in crude oil prices, corporate earnings expectations and domestic liquidity will continue to influence sentiment,” InvestData added.
