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The Nigerian stock market suffered a sharp setback on Tuesday as investors lost N1.879 trillion in market value amid heavy sell-offs linked to preparations for the forthcoming Dangote Petroleum Refinery initial public offering (IPO).
The decline ended the market's three-day winning streak, with analysts attributing the sell-off to investors liquidating existing holdings to raise funds for participation in the highly anticipated IPO.
Managing Director of Globalview Capital Ltd., Aruna Kebira, said the market downturn was driven by widespread portfolio repositioning ahead of the refinery's public offer.
According to him, sell orders overwhelmingly outpaced purchases during the trading session as investors sought to free up cash for the IPO.
"Preparations for the Dangote Refinery IPO caused today's market decline. Sales were about 15 times higher than purchases as many investors are selling to position themselves for the offer," Kebira said.
He noted that market expectations had shifted from speculation to certainty following the official signing ceremony, with the IPO expected to open on the Nigerian Exchange on September 14.
As a result of the sustained selling pressure, the Nigerian Exchange's market capitalisation fell by N1.879 trillion, dropping from N160.600 trillion to N158.721 trillion, while the All-Share Index shed 2,897.67 points, or 1.17 per cent, to close at 244,802.11 from 247,699.78.
The broad-based decline left the market with a negative breadth of 64 losers against four gainers, although the year-to-date return remained positive at 57.31 per cent.
FG162029S1 recorded the steepest loss, falling 31.19 per cent to close at N75. AVA Capital declined by 10 per cent to N5.40, Fortis Global Insurance lost 9.89 per cent to N1.64, Abbey Mortgage Bank dropped 9.74 per cent to N6.95, while Critical Minerals Financing Corp shed 9.66 per cent to N2.15.
On the gainers' chart, Ellah Lakes led with a 7.07 per cent increase to N9.85. Nigerian Exchange Group rose 1.38 per cent to N131.90, Learn Africa gained 1.16 per cent to N8.75, while Wema Bank advanced 0.68 per cent to close at N29.70 per share.
Despite the market decline, trading activity remained robust. Total transactions surged by 84.67 per cent to 753.17 million shares valued at N27.83 billion in 54,051 deals, with NEM Insurance Plc emerging as the most actively traded stock after recording 131.73 million shares worth N4.07 billion.
