The Nigerian Exchange (NGX) closed August with a marginal gain, extending its four-month bullish streak despite profit-taking, selloffs, and mixed investor sentiment that kept the All-Share Index (ASI) largely flat.
The rally was underpinned by strong performances in insurance and consumer goods stocks, even as banking, energy, and real estate counters came under selling pressure due to portfolio rebalancing and capital rotation into undervalued equities.
Sector Performance
Insurance stocks dominated the month, with several counters posting double-digit growth. The Insurance Index surged 44.30%, while the Consumer Goods and Industrial Goods indexes gained 8.91% and 1.83%, respectively. Conversely, the Banking Index shed 5.09%, the Pension Index fell 3.56%, and the Oil and Gas Index declined 12.19%.
Month-to-date, the ASI inched up by 0.31%, while the NGX 30 dipped 0.38%. On a year-to-date basis, the ASI remains up 36.31%, with the Insurance Index leading at 78.77% growth, followed by Consumer Goods at 84.24%, Banking at 40.95%, and Pension at 47.30%.
Weekly Market Movements
- Week 1: The ASI climbed 3.76% to 146,570.69 points, boosted by strong demand for mid- and large-cap stocks.
- Week 2: The market consolidated as investors booked profits, with the index dipping 0.51% to 145,822.36 points.
- Week 3: The index suffered its steepest monthly decline, falling 3.03% to 140,332.44 points as banking and energy stocks came under pressure.
- Week 4: Despite an initial rebound, heavy selloffs dragged the ASI to 140,295.47 points, sealing a 2.51% weekly loss.
Top Gainers and Losers
Mutual Benefits Assurance led gainers with a 60.44% rise to N1.46. AIICO Insurance and Royal Exchange followed closely with gains of 59.82% and 59.33%, respectively. Other notable risers included Sovereign Trust Insurance (+59.06%), Cornerstone Insurance (+54.46%), and Tripple Gee & Company (+30.23%).
On the losers’ side, UPDC REIT shed 17.72% to N3.44, while LivingTrust Mortgage Bank fell 16%. Berger Paints dropped 14.67%, VFD Group lost 11.19%, and Unilever Nigeria declined 10.29%. Among blue chips, Stanbic IBTC Holdings slipped 15.4% following its rights issue announcement.
Technical Outlook
The ASI closed below the 141,000 psychological threshold at 140,295.49 points, with indicators pointing to weakness. RSI trended toward oversold levels, while heavy sell pressure was evident in banking and industrial stocks. Key support lies at 140,000 and 138,500 points, while resistance is pegged at 141,800 and 143,000 points.
September Outlook
Analysts expect continued volatility in September, with investor attention focused on interim dividend-paying banks and Q3 earnings. Bargain-hunting is likely in insurance and consumer goods stocks with strong fundamentals, while profit-taking may persist in banking and industrial counters. Market direction will also be shaped by macroeconomic data, global oil prices, and outcomes from the CBN’s next policy meeting.
Economic Highlights
The Federation Account Allocation Committee (FAAC) disbursed N2.001 trillion in July, with the Federal Government receiving N735.08 billion, states N660.35 billion, local councils N485.04 billion, and oil-producing states N120.36 billion. July revenue, at N3.836 trillion, was lower than June’s due to weaker statutory inflows.
Separately, President Bola Tinubu, during an official visit to Brazil, announced the return of Petrobras to Nigeria after five years. New agreements covering trade, aviation, finance, and energy were signed, with President Lula confirming the launch of Air Peace flights between Lagos and São Paulo.
Global Market Recap
U.S. equities closed lower on Friday, weighed by tech selloffs as Dell slumped 8.9% and Nvidia dropped 3.3%. The Nasdaq shed 1.15%, while the S&P 500 fell 0.64% and the Dow slipped 0.20%. Despite the pullback, all three indices ended August higher, with the Dow up 3.2%, the S&P 500 gaining 1.9%, and the Nasdaq rising 1.6%.
Inflation data supported expectations of a U.S. Federal Reserve rate cut in September, with traders pricing in an 89% chance. The dollar weakened, oil prices retreated (WTI: $64.01, Brent: $68.12), and Treasury yields inched higher ahead of next week’s U.S. jobs report.
