The stock market experiences a loss of N623 billion due to portfolio rebalancing.

Last week, the stock market experienced a downturn, with investors collectively losing N623 billion as fund managers rebalanced their portfolios in anticipation of first-quarter results. The Nigerian capital market saw a decline of 1.08 percent, closing at 103,437.67 points, while the market capitalization dipped by 1.05 percent to N58.5 trillion.

Analysts attribute the market's performance to ongoing portfolio rebalancing efforts and the release of corporate earnings for the first quarter of 2024. Trading activities intensified, with investors exchanging 3.68 billion units of shares valued at N57.89 billion in 40,726 deals. This marked a significant increase compared to the previous week, with 1.80 billion units valued at N52.04 billion traded in 38,550 deals.

The surge in trading activity is largely attributed to window dressing activities by fund managers in anticipation of positive first-quarter scorecards. While all indices finished lower except for consumer goods and growth, which appreciated by 0.94 percent and 0.32 percent, respectively.

May & Baker, Dangote Sugar, and Ikeja Hotel contributed to the positive performance of the consumer goods index, while adverse price movements in the banking sector led to a 6.73 percent week-on-week drop in the banking index.

Similarly, the insurance and industrial goods sectors closed negatively, with declines of 0.85 percent and 0.27 percent, respectively. Adverse price movements in key stocks such as FBN Holding, Sterling Financial Holdings, Julius Berger, and Guaranty Trust Holding Company were cited as contributing factors.

Despite these challenges, the oil & gas sector closed the week on a relatively muted note compared to the previous week.

In terms of trading volume, the financial services industry led the activity chart, followed by the services and conglomerate industries. Abbey Mortgage Bank, Tourist Company of Nigeria, and Zenith Bank were the top three equities traded during the week in volume terms.

Looking ahead to the second quarter, investment banker and stockbroker, Tajudeen Olayinka, expressed optimism about the market's performance. He noted that while the first quarter saw disruptions and profit-taking, the industrial goods and consumer goods sectors outperformed the market. Olayinka expects a robust performance in the second quarter, supported by efforts to stabilize the exchange rate and inflows from foreign portfolio investors and Diaspora remittances.