The Nigerian stock market ended August on a negative note, with the All Share Index falling by 1.22% due to macroeconomic headwinds and uncertainty surrounding bank recapitalization.
This marks the second consecutive monthly loss, with the index dropping 2.28% in July. The year-to-date return has also declined to 29.1%, down from the March 2024 high of 39.8%.
Stocks have now posted losses three months out of eight this year with April experiencing the largest drop of 6%, the largest monthly drop since January 2021.
Dangote Cement, BUA Cement, and MTN drove the 5.16% decline in the NGX Premium Index in August.
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These stocks have a combined market capitalization of over N15 trillion representing over 27% of the market capitalization of the NGX.
Dangote Cement saw its share price decline by 19%, BUA Cement by 20.5%, while MTN, on the other hand, saw its share price fall by 10% following back-to-back losses induced by foreign exchange challenges.
In contrast, stocks like Oando, Julius Berger, and TotalEnergies recorded substantial gains of 435.9%, 74%, and 73%, respectively.
Specifically, the acquisition of a significant stake in Agip Upstream Asset contributed to Oando’s winning streak, causing it to lead the gainers’ chart with a whopping 435.9%.
In total, August saw 50 stocks fall, 64 stocks rise, and the remaining stocks closed flat at 0%.
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The Nigerian stock market experienced losses in August due to profit-taking activities and dividend payments which often lead to price adjustments.
Additionally, investors seem to be shifting their focus ahead of the upcoming third-quarter results in October.
Despite positive macroeconomic indicators, such as a decline in inflation and a faster GDP growth rate, the stock market’s performance has not mirrored the broader economic recovery.
Investors are cautious due to lingering uncertainties and are focusing on profit-taking after a period of gains. Furthermore, the shift of retail investor inflows towards bank recapitalization efforts has diverted attention and capital away from other sectors.
