Stock market sustains loss position as profit-taking wipes out N1.8trn

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•Adonri projects monetary tightening in H2’26

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By Peter Egwuatu

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The Nigerian stock market closed lower again last week, making it the third consecutive week decline, pressured by profit-taking in blue-chip stocks.

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However, the latest loss amounting to 1.8 trillion indicates that the negative position is moderating.

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Three weeks ago the market took a major hit at N5.6 trillion loss, and the following week the loss position was N2.4trillion.

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Analysts stated that the sustenance of sell off of shares was an extension of market corrective trend across key sectors.

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Analysis of trading last week shows that the Nigerian Exchange Limited, NGX market capitalisation, which represents the total value of stocks listed on the Exchange, closed at N147.102 trillion from N148.905 trillion the previous week.

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Similarly, the NGX All-Share Index, ASI, another major market indicator nosedived by 1.2% to close at 229,240.34 points from 232,049.02 points the previous week.

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Specifically, MTN Nigeria shed -9.6%, Dangote Cement declined -7.5%

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Aradel -10.0%, WAPCO -8.3%, Zenith Bank -7.1% and GTCO -5.4%, to significantly drag down the NGX ASI.

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Consequently, the Month-to-Date and Year-to-Date, YtD, returns settled at 1.6% and 47.3%, respectively.

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Meanwhile, reacting to market projection for the second half 2026, H2’26, Chief Executive Officer of HighCap Securities Limited, David Adonri, expressed optimism that the Nigerian equities market will rebound in the second half of 2026 despite the recent correction which had led to a bearish run.

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He also projected monetary tightening by the Central Bank of Nigeria in H2’26.

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He noted that politicians and some high net worth investors are selling off shares for cash ahead of the general election.

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Speaking during a market review for the first quarter of 2026 and outlook for the second half of the year at the Capital Market Correspondents forum held Tuesday, in Lagos, Adonri said the recent decline in share prices in June 2026 followed an exceptional rally that delivered about 62 per cent returns in the first five months of the year, making the Nigerian stock market one of the world’s best-performing equity markets.

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According to him, the current downturn represents a normal market correction rather than a structural weakness, stressing that the country’s macroeconomic fundamentals remain supportive of long-term growth.

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“The market is simply realigning stock prices with the underlying fundamentals of listed companies after an extended rally,” he said.

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Adonri noted that both the equity and debt markets performed strongly in the first half of the year, with investors benefiting simultaneously from capital gains in equities and attractive yields in fixed-income securities due to elevated interest rates.

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He also highlighted the resurgence of the primary market, revealing that about N6.95 trillion was raised through new issues during the first half of the year, compared with significantly lower levels in previous years. According to him, “the capital raised is financing productive sectors of the economy rather than government activities.”

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He attributed renewed investor confidence to improvements in key macroeconomic indicators, including stronger foreign exchange reserves, increased government revenue, higher oil production and improved sovereign credit ratings by international rating agencies.

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Adonri said: “Foreign portfolio investment also strengthened during the period, reflecting growing international confidence in Nigeria’s economic reforms.”

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Looking ahead, he projected a gradual recovery in the equities market as companies begin releasing half-year financial results, adding that strong corporate earnings could stimulate renewed demand for stocks.

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However, he warned that interest rates are likely to remain relatively high because of inflationary pressures and possible monetary tightening by the CBN.

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Also reacting to the market outlook, analysts at Cordros Capital stated: “Looking ahead, we expect market sentiment to improve as investors selectively accumulate beaten-down stocks at attractive entry points, favouring fundamentally sound counters ahead of the H1’26 earnings season. Nonetheless, elevated yields on government instruments are expected to sustain competition for investor liquidity, with anticipated primary market activity remaining a headwind to equities.”

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