The Nigerian equities market on Tuesday halted its three-day bullish run as market capitalization fell by N1.879 trillion, amid heightened sell-offs by investors positioning their portfolios ahead of the Dangote Petroleum Refinery Initial Public Offering, IPO.
The sell-off triggered a broad-based decline, with 64 stocks recording losses compared with only four gainers, as investors sought to raise funds in anticipation of the offer, which is expected to open on the Nigerian Exchange on Sept. 14.
Mr Aruna Kebira, Managing Director of Globalview Capital Ltd., attributed the market downturn to increased portfolio repositioning ahead of the IPO.
Kebira said investors were selling their holdings to raise funds for the offer, creating a significant imbalance between sell and buy orders.
“Preparations for the Dangote Refinery IPO caused the downturn in performance today. The number of people selling is high. Today, our sales were about 15 times higher than purchases.
“Everybody is selling to prepare for the Dangote Refinery IPO and the further disruption expected in the market,” he said.
The analyst said the strong selling pressure had weakened demand as investors repositioned their portfolios to participate in the IPO.
He added that the development was no longer speculative following the formal signing ceremony and the commencement of activities ahead of the offer.
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“The idea was muted before, but now the signing ceremony has been held and the offer is expected to open on the trading floor on Sept. 14. So, it is no longer a rumour,” he said.
Market capitalization declined from N160.600 trillion to N158.721 trillion, representing a loss of N1.879 trillion or 1.17 per cent.
Similarly, the All-Share Index, ASI, fell by 2,897.67 points, or 1.17 per cent, from 247,699.78 to 244,802.11. The decline pushed the market’s year-to-date return to 57.31 per cent, while market breadth closed negatively with 64 losers and four gainers.
FG162029S1 led the losers’ chart, declining by 31.19 per cent to close at N75. AVA Capital followed with a 10 per cent loss, ending the session at N5.40, while Fortis Global Insurance fell by 9.89 per cent to N1.64 per share.
Abbey Mortgage Bank declined by 9.74 per cent to close at N6.95, while Critical Minerals Financing Corp. shed 9.66 per cent to settle at N2.15 per share.
On the gainers’ chart, Ellah Lakes led with a 7.07 per cent increase to N9.85. Nigerian Exchange Group gained 1.38 per cent to close at N131.90, while Learn Africa rose by 1.16 per cent to N8.75 per share.
Wema Bank also gained 0.68 per cent to close at N29.70 per share. Trading activity strengthened during the session, with total volume traded rising by 84.67 per cent to 753.17 million shares, valued at N27.83 billion across 54,051 deals.
NEM Insurance Plc recorded the highest trading volume and value, with 131.73 million shares worth N4.07 billion changing hands.
The figure represented 17.49 per cent of the total market volume and 14.63 per cent of the total market value traded during the session.
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