Analysts hold that profit-taking and fixed-income yields are the major factors responsible for the Nigerian Exchange’s slow start to 2025.
The first weeks of trading in 2025 have seen the Nigerian Exchange (NGX) slip down, with the All-Share Index closing on January 17 at 102,307.94. This marks a 0.60 percent decline from 2024’s closing ASI of 102,926.40.
This marks the slowest start to the year for the NGX since 2019.
In 2024, the NGX advanced by 37.65 percent, with over 20 listed equities returning triple digits, such as Sunu Assurances which returned about 877 percent, Oando with 529 percent, Conoil with 362 percent, among others.
According to analysts who spoke to BusinessDay, the slow start to the year is not far-fetched.
Read also: NGX erases 2025 gains as investors sell Dangote Cement, Transcorp Power, others
“Early in the year, it’s quite customary for players to position themselves to benefit from the market rally typically seen between November and December,” Samuel Oyekanmi, a Research and Insight Associate at Norrenberger explained.
“As the year begins, we often see investors taking profits, and that’s exactly what’s happening now. After significant surges toward the end of last year, we’re currently witnessing a correction in the share prices of some of those stocks.”
Oyekanmi who was speaking on BusinessDay TV’s Economy and Markets further highlighted, “If you look at the market, there’s been no significant information that has really triggered a buy or sell decision from the market.”
He also acknowledged the role of the T-bills auction which happened on January 8.
“The T-bills auction of last week showed that T-bills stop rates are still high, although slightly reduced from the previous auction, with such high rates, chances are high that risk-averse investors would reallocate their funds by taking profit from the equities market and position them in fixed income instruments.”
Just like Oyekanmi posited, investors have been taking profit on some of the top gainers of 2025. Sunu Assurances, which surged by an impressive 414% between November and December 2024, has recorded the sharpest decline of any stock on the NGX in 2025, with a year-to-date drop of 38.4% as investors take profit from the stock.
The most noteworthy decliner in the market, Dangote Cement (DANGCEM) has also been a source of concern for market players. Year-to-date, DANGCEM has slipped by 16.5 percent, as its share price hit a 53-week low on January 16 before rebounding to close at N400 per share.
Read also: Dangote Cement hits 53-week low as investors dump N1.8 billion shares
Commenting on Dangote Cement, Oyekanmi observed that there is no significant information “triggering a buy on Dangote Cement.”
He explained that the stock’s bullish surge in the first quarter of 2024 has been corrected in January, given the absence of any market-moving developments to justify that rally.
Oluwaseun Magreola, who heads the Research and Investment team at STL Asset Management, also spoke on BusinessDay’s Economy and Markets noting about Dangote Cement,
“Nothing fundamental is going on with Dangote Cement, however, maybe we can say the downgrade by Fitch on Dangote Industries Limited played a small role. However, Dangote Cement has been quiet, nothing major has happened.”
“We can only attribute it to portfolio rebalancing, although some of us who hold it in our portfolio have experienced losses but we’re confident in the stock.”
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