The Nigerian equities market extended its bullish run yesterday, with market capitalisation surging to a record N160.60 trillion, following the listing of 8.09 billion new ordinary shares of Dangote Sugar Refinery Plc on the Nigerian Exchange (NGX).
The development pushed total market value higher by 0.65 per cent, significantly outperforming the 0.29 per cent gain recorded by the NGX All-Share Index, which closed at 247,699.78 points.
The latest advance lifted the market’s year-to-date return to 59.18 per cent, underscoring the strength of the equities rally despite increasingly weak breadth.
The sharp rise in market capitalisation was largely driven by the additional Dangote Sugar shares admitted to trading, rather than a broad-based appreciation in equity prices.
Monday’s trading session revealed a widening disconnect between the headline index and underlying investor sentiment. Forty-three stocks declined against only 12 gainers, producing a weak market breadth of 0.3x.
The biggest losers were led by Caverton Offshore Support Group, Omatek Ventures, Consolidated Hallmark Insurance, Sunu Assurances Nigeria and Daar Communications, while Zichis Agro-Allied , Aradel Holdings, Nascent Technologies, International Breweries and MTN Nigeria recorded the strongest gains.
Sectoral performance was equally mixed, with gains concentrated in selected sectors. The Oil and Gas Index led the advance, rising 5.90 per cent, followed by the Commodity Index, which gained 4.04 per cent, while the Consumer Goods Index rose 0.79 per cent.
These gains offset declines across the Insurance, Banking and Industrial Goods sectors.
Trading activity, however, weakened considerably. Total volume traded fell by 81.81 per cent to 407.85 million shares, while market turnover dropped 62.88 per cent to N27.25 billion.
Despite the sharp decline in volume and value, the number of transactions increased by 22.51 per cent to 52,322 deals, suggesting continued participation even as the value and volume of shares exchanged moderated.
Market analysts said the immediate outlook remains positive, particularly as foreign-investor interest could improve following Nigeria’s confirmed return to the FTSE Russell Frontier Market universe, effective September 21.
The oil and gas sector is also expected to remain a major driver of sentiment, supported by firmer crude oil prices and heightened geopolitical tensions arising from the United States-Iran conflict.
However, the breadth figures indicate that the market’s record-level performance is yet to translate into widespread gains across listed equities.
With the All-Share Index now up 59.18 per cent year-to-date, investors may increasingly focus on whether the rally can broaden beyond a relatively narrow group of stocks and sectors as the market approaches Nigeria’s return to the FTSE Russell Frontier Market classification.
For now, the NGX continues to break higher, but Monday’s session showed that the strength of the headline market masks a considerably more selective investment environment beneath the surface.