By Peter Egwuatu 

The Nigerian stock market closed in a negative territory at weekend following selloffs in some blue chip companies across the sectors of the market. This came despite the declining yields in the fixed income market.

Usually, the markets move in opposite directions.

The selloffs were majorly driven by the losses recorded in Transcorp shares, which declined by -17.7%, Access Holding Company -6.8%, MTNN -3.2% among others.

Market analysts explained that the market remained bearish because the dividend payouts so far announced were seemingly  below market expectation.

They noted that the development  calls for new strategies to protect capital and profit from the current phase of the market, adding that  this wave of corrections and funds leaving the market are short-term realities of any market in the world adding that this may be of concern for some investors while others are taking advantage of the pullbacks.

The pullbacks, according to the experts, are driven by market dynamics in repositioning and preparing for more audited scorecards and dividend expectation.  

Meanwhile, analysis of the market performance last week showed that the Nigerian Exchange Limited, NGX All-Share Index (ASI) down by 1.2%   Week on Week, W/W to 106,533.26 points from 107,821.38 points the previous week.

Also, investors lost over N476 billion of their investment on the Exchange, as the market capitalisation, which shows the value of total investment listed on the NGX   declined to N66.717 trillion from N67.193 trillion the previous week

Consequently, the Year-to-Date, YtD   return moderated to 3.5%. Furthermore, trading activity weakened, as the total volume and value declined by 1.9% W/W and 8.0% W/W,   respectively. Also, sectoral performance was broadly negative, as the Banking Index declined by -2.9% , Insurance   Index -2.3%,   Consumer Goods Index -1.7% , and Oil & Gas Index -0.2%, while the Industrial Goods Index remained flat.

Commenting on the market outlook, analysts at Cordros  Research  stated : “ Looking ahead, we expect market volatility to persist as investors contend with delays in bank and insurance earnings filings and dividend announcements while also monitoring yield movement in the fixed income market”.

Also commenting, analysts at InvestData Consulting stated: “The extended downtrend is happening in the midst of selloffs hitting some mid to large cap stocks across some major sectors of the market, despite the declining yields in the fixed income market.

“We expect mixed sentiment as market players continue to watch the new phase of NGX as investors digest latest TB rates and  corporate earnings and corporate actions in the midst of portfolio reshuffling and positioning. Even as more earnings reports are expected to hit the market with dividend announcement.. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value”.