The Nigerian stock market ended last week ended on a bearish note, as both the Nigerian Exchange, NGX All Share Index, ASI and market capitalisation fell to 97,432.02 points, and market N59.038 trillion, down from the previous week's close of 99, 448. 91 points and N59. 432 trillion respectively.
Specifically, investors lost over N1.222 trillion of their investments on the Exchange following the bearish sentiments that was driven by decreases in the share prices of prominent stocks, including Aradel which was newly listed, declining by 10.00%, UACN 5.73% , UBA 2.68% among other shares.
Consequently, the year-to-date ASI return to 30.30%.
Meanwhile, for the month of October, 2024, the market also closed on a negative note, after the composite NGX All-Share index lost 907.56 basis points on a selling sentiment, as investors seemingly ignored the mostly better-than-expected corporate reports.
Analysts noted that investors seem to have considered other factors more important than the low valuation of most stock that reveals higher upside potentials ahead of the year end seasonality and full year payout. Impressive numbers from some sectors point to the possibility of higher rewards which will likely impact positively on share prices.
One such consideration for the decline , according to analysts is the hyperinflationary environment that continues to threaten nearly all investment window, with inflation rate for the month of September at 32.70% and above the NGX's year to date return and fixed income market yields.
It should be that the nation's Gross Domestic Product, GDP has been struggling to expand in the past two quarters, closing at 3.19% in Q2, even as all eyes are on the expected Q3 GDP report from the National Bureau of Statistics (NBS) ahead of November policy meeting of the Central Bank of Nigeria.
On market outlook, analysts at InvestData Consulting stated: " Volatility is expected to continue in November, even as the outlook remains mixed due to likely price corrections, or pullbacks for a few days due to profit taking and portfolio reshuffling ahead of year-end and 2024 corporate actions. The anticipated correction in the new month will, however, strengthen recovery.
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But investors at this point should not be greedy, but let their decisions be guided by preset investment goals and exit strategies, even as the healthy inflow of funds into the equity assets due to prevailing low rates in money market is likely to continue as the market look to the last MPC meeting for the year in the new month of November.
Again, the current undervalue state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation for the rest of the year".
