Market Cap Rises To N103.78tn Despite 47% Trading Volume Drop

Trading activity on the Nigerian Exchange (NGX) moderated last week as total turnover declined sharply, even as strong price appreciation across equities lifted market capitalisation to a new high of N103.78trn.

Data from the Exchange showed that investors traded a total of 4.164 billion shares valued at N94.026bn in 248,254 deals during the week under review.

This represented a significant slowdown compared with the previous week, when 7.821 billion shares worth N134.47bn were exchanged in 150,799 deals, translating to a 46.8 per cent drop in trading volume week-on-week.

Despite the softer trading activity, market sentiment remained firmly positive.

The NGX All-Share Index advanced by 3.71 per cent to close at 162,298.08 points, while overall market capitalisation appreciated by 3.84 per cent to settle at N103.78trn, reflecting broad-based price gains across listed equities.

Sectoral performance was largely bullish, with all major indices closing higher during the week, except the NGX Sovereign Bond Index, which ended flat.

The strong performance underscored sustained investor confidence in equities, particularly in large-cap and fundamentally strong stocks.

The Financial Services sector dominated trading activity, accounting for the bulk of transactions on the Exchange. A total of 2.651 billion shares valued at N35.96bn were traded in 93,706 deals within the sector, representing 63.67 per cent of total equity turnover by volume and 38.24 per cent by value.

The Services sector followed, with 369.963 million shares worth N3.38bn exchanged in 16,521 deals, while the ICT sector ranked third, recording a turnover of 297.938 million shares valued at N5.73bn in 21,548 deals.

Trading in three highly active stocks, Universal Insurance Plc, Linkage Assurance Plc and Access Holdings Plc, accounted for a sizeable portion of market activity.

Combined, the equities recorded a turnover of 1.261 billion shares worth N5.06bn in 13,819 deals, contributing 30.28 per cent of total market volume and 5.38 per cent of total value traded during the week.

Market breadth also improved, signalling a broadly positive close for equities. Eighty-four stocks appreciated in price, surpassing the seventy-three gainers recorded in the preceding week.

Meanwhile, twenty-two equities declined, fewer than the twenty-three recorded previously, while forty-two stocks closed unchanged, compared with fifty-one in the prior week.

Analysts noted that the divergence between declining volumes and rising market capitalisation suggests continued accumulation of stocks by investors, driven by expectations of earnings resilience, attractive valuations and improving macroeconomic fundamentals.

The sustained upward movement in prices, despite lighter trading, reinforces the view that bullish sentiment remains intact in the Nigerian equities market.