NGX Faces Correction as Investors Lock in Profits

The Nigerian Stock Exchange (NGX) is undergoing a correction as investors engage in profit-taking after a record bull run. The NGX All-Share Index (ASI) has settled below the 240K mark, maintaining a year-to-date gain of 54%.

Following historic highs earlier this year, the market has faced aggressive selloffs, resulting in a loss of trillions of naira in market valuation and ending a prolonged winning streak. Key support levels for the index are identified at 235,000-237,500 and 228,000-230,000, with a significant push needed through the 242,500-245,000 range to resume the upward trend.

Domestic retail and institutional investors account for approximately 90% of trading activity, contrasting with previous market downturns driven by foreign capital flight. Current foreign portfolio penetration is around 10%, hindered by unresolved currency and macroeconomic issues.

Recent market losses have raised concerns among investors, particularly in sectors like banking, oil and gas, and industrial goods, which have seen extreme selloffs.