The Nigerian stock market ended the first week of November on a bearish note as profit-taking dominated trading sentiment amid domestic and external headwinds, leaving investors to suffer a ₦2.83 trillion loss.
Trading activity started on Monday, November 3, on a bearish note, sustaining the momentum all through the week.
As a result, the total market capitalisation of all listed stocks declined by 2.89 per cent to ₦94.998 trillion on Friday, November 7, from ₦97.83 trillion when it opened on Monday, November 3, reducing investors’ wealth at the end of the week’s trading.
Similarly, the five-day trading sessions saw the All-Share Index (ASI) fall by 2.99 per cent week-on-week to close at 149,524.81 basis points.
Some analysts said the negative sentiment that greeted the market could be ascribed to a couple of factors, including sustained selling pressure as investors adjusted portfolios in response to geopolitical tensions surrounding the United States-Nigeria diplomatic faceoff, year-end portfolio rebalancing, and expectations of window-dressing activities by institutional players.
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Despite the downturn, the market still maintained a robust year-to-date (YTD) return of 45.27 per cent, underscoring its overall resilience in a volatile macroeconomic environment.
Market breadth remained heavily skewed to the bears, as 20 stocks appreciated against 75 that declined, indicating widespread sell pressure across sectors.
Trading activity slowed as total deals fell by 8.82 per cent to 145,518 trades, while transaction volume and value plunged by 52.19 per cent and 26.40 per cent to 3.58 billion units and ₦107 billion, respectively.
The decline in market activity suggests waning investor appetite and a cautious stance ahead of the year’s final trading months.
Across key sectors, performance was broadly negative, reflecting deepened profit-taking and sectoral weakness.
The banking index led the losers’ chart with a 3.85 per cent drop to 1,409.88 points, pressured by sell-offs in tier-1 stocks. The insurance sector fell by 7.56 to 1,138.08 points, while the consumer goods and oil and gas indices dropped by 2.54 per cent to 3,444.41 points and 4.8 per cent to 2,773.07 points, respectively.
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Similarly, the industrial goods and commodity indices closed lower by 1.09 per cent to 5,891.14 points and 1.63 per cent to 1,210.38 points. Amid a week dominated by negative investor sentiment, selective bargain-hunting supported a few stocks.
NCR Nigeria, Eunisell Interlinked, Union Dicon Salt, Honeywell Flour Mill, and UACN Property Development Company topped the gainers’ table on renewed buying interest and improved liquidity positions.
Conversely, Sovereign Trust Insurance, C&I Leasing, Skyway Aviation Handling Company, Berger Paints, and International Energy Insurance suffered steep losses, reflecting sustained sell pressure and weak sentiment among retail and institutional investors alike.
Bearish trend not unusual – analyst
Sharing his thoughts on the week’s trading, Uche Uwaleke, a financial economist and professor of capital markets and the pioneer director of the Institute of Capital Market Studies, Nasarawa State University, Keffi, said the bearish trend was not unusual but felt it was too early to ascribe it to the proposed capital gains tax (CGT) in the new tax law expected to take effect from January next year.
Pinnacle Daily reports that the tax reform committee has recommended a 25 per cent CGT on the sale of shares above 150 million or on a ₦10 million gain in the sale of shares. “I think sometimes we should expect this kind of behaviour. You know, market behaviour from business is very unusual.
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“As being responsible for this, CGT is not going to begin until January, and to say that traders or investors are really going to take positions based on that would be presumptuous,” Uwaleke said on Channels Television’s programme on Friday.
He maintained that it would be too premature to say that what is happening in the stock market is a result of the CGT that will take effect from January 2026.
“I think the major reason for what is happening now is profit-taking and the fact that portfolio managers are also rebalancing to fix income assets where we have continued to see attractive yields.
“I also think investors are reacting to some of the earnings from companies which have not been promising. I also think this will reverse before the year’s end. The year-to-date return is still strong, about 49% the last time it was checked, still way higher than the inflation rate at 18.02%. It is still a rare positive rate of return…,” Uwaleke added.
Looking ahead
Analysts at Cowry Asset Management believe that the market is likely to remain cautious as investors continue profit-taking and reallocate capital in line with fiscal-year considerations.
“Although near-term volatility may persist, the impressive YTD gains suggest that underlying fundamentals remain relatively strong.”
“Market direction in the coming weeks will likely be influenced by macroeconomic indicators, particularly inflation, exchange rate stability, corporate earnings updates, and liquidity flows from both local and foreign investors.
“However, investors are expected to maintain a selective approach, tilting toward fundamentally sound and defensive stocks capable of weathering short-term market swings,” the analysts added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
