By Taiye Olayemi
The Nigerian equities market suffered a major setback on Tuesday, shedding N1.879 trillion in market value as investors intensified sell-offs to raise funds ahead of the planned Initial Public Offering (IPO) of the Dangote Petroleum Refinery.
The sharp decline brought an abrupt end to the market’s three-day bullish run, with analysts attributing the widespread selling pressure largely to investors repositioning their portfolios in anticipation of the highly awaited refinery offer.
Managing Director of Globalview Capital Ltd., Mr Aruna Kebira, said investors were liquidating existing holdings to free up funds for the Dangote Refinery IPO, creating a significant imbalance between sell and buy orders.
“Preparations for the Dangote Refinery IPO caused the downturn in performance today,” Kebira said.
He disclosed that selling activity at his firm was significantly higher than purchases during the session.
“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.
Kebira said the intense sell-off had weakened demand across the market as investors sought to position themselves for participation in the refinery offer.
According to him, expectations surrounding the IPO had moved beyond speculation following the formal signing ceremony and the commencement of preparations for the offer.
“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 capitalisation fell from N160.600 trillion to N158.721 trillion, representing a decline of N1.879 trillion, or 1.17 per cent.
The All-Share Index (ASI) also dropped by 2,897.67 points, or 1.17 per cent, from 247,699.78 to 244,802.11.
The downturn reflected broad-based selling, with 64 stocks recording losses compared with only four gainers.
Despite Tuesday’s decline, the market’s Year-to-Date return remained strong at 57.31 per cent.
FG162029S1 led the losers’ chart, declining by 31.19 per cent to close at N75.
AVA Capital followed with a 10 per cent decline to N5.40, while Fortis Global Insurance shed 9.89 per cent to close at N1.64 per share.
Abbey Mortgage Bank fell by 9.74 per cent to N6.95, while Critical Minerals Financing Corp declined by 9.66 per cent to N2.15 per share.
On the gainers’ side, 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, closing at N29.70.
Despite the decline in market value, trading activity increased significantly during the session.
Total volume traded rose by 84.67 per cent to 753.17 million shares, valued at N27.83 billion, across 54,051 deals.
NEM Insurance Plc dominated trading, with 131.73 million shares worth N4.07 billion changing hands.
NAN reports that the insurer accounted for 17.49 per cent of total market volume and 14.63 per cent of total market value traded during the session.
The heavy sell-off highlights the potential near-term impact of the Dangote Refinery IPO on liquidity and investor positioning in the Nigerian equities market as the Sept. 14 offer date approaches.
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