NGX Loses N5.42 Trillion in 20-Day Market Correction

The Nigerian Exchange (NGX) faced a significant market correction over 20 days, resulting in a loss of N5.42 trillion, reducing its total equity valuation to N154.98 trillion by August 20. This downturn followed a historic peak of N160.40 trillion on July 31, primarily driven by widespread profit-taking among investors capitalizing on mid-year gains.

The NGX All-Share Index (ASI) fell by 2.14 percent, from 245,283.69 points to 240,037.80. Low-cap equities, insurance companies, and major oil and gas players were particularly affected, with International Energy Insurance experiencing frequent maximum daily losses.

The National Insurance Commission (NAICOM) revoked Universal Insurance's license, rendering it worthless. Despite the slump, year-to-date returns remain strong at 54.73 percent, attributed to structural market shifts and enhanced liquidity.

Analysts expect a rebound in the second half of the year, supported by institutional inflows and potential re-inclusion of Nigeria in the FTSE Russell Frontier Market Index, which could enhance market visibility and foreign investment.