Nigeria's NGX Sheds N535bn in Third Weekly Decline as Banks Lead Selloff

Nigerian equities closed last week lower, marking the third consecutive weekly decline as a selloff in banking stocks dragged the Nigerian Exchange (NGX) All Share Index down and wiped about N535 billion from market capitalisation.

The NGX had entered October on firm footing, but three straight weeks of losses have pulled the benchmark off its recent highs. On Friday, the All Share Index closed at 247,539.73 points after a 0.07 per cent dip on the day, leaving total market capitalisation at about N160.73 trillion, according to exchange data compiled for the session.

Banking stocks carry the weight

Banking counters accounted for most of the week's damage. After a strong run for tier-one lenders earlier in the year, investors rotated out of the sector, locking in gains and rotating into quieter corners of the market. The scale of the weekly outflow — roughly N535 billion in market value — points to coordinated profit-taking rather than isolated stock picking.

Traders said the pullback also reflects a broader valuation check. With the NGX All Share Index still up sharply over the past year, portfolio managers have been trimming positions that ran ahead of earnings, even as full-year results season approaches.

What the third week of losses signals

Three straight weekly declines are rare during a bull year, and the pattern is being watched closely by allocators who decide whether to add to Nigerian equity exposure at home and abroad. Liquidity has stayed comparatively thin in several sessions, which has amplified price moves on both the way up and the way down.

Analysts tracking the exchange said the coming weeks will test whether the decline is a healthy correction inside a broader uptrend or the start of a longer pause. Much will depend on how banks and other heavyweights perform as third-quarter earnings come into focus, and on whether foreign portfolio flows resume after weeks of uneven demand.

Outlook into the new week

Investors head into Monday's session with the market's weekly losing streak intact and valuations still stretched in parts of the banking and industrial groups. Exchange turnover and the direction of banking shares will remain the first signals of whether the third weekly decline is a pause or a turning point.