X-raying All-Share Volatility Index (ASI) In Nigerian Equities Market

BY (EDITORIAL)

There is no gain saying that the Stock Market is increasingly becoming one of the most viable popular investment channels globally. This is because of its high rate of returns on Investment.

The Nigerian Stock Market is no exception as it constitutes an integral part of the global economy to the extent that any volatility in the market engenders personal and corporate financial losses.

In her treatise published in the International Journal of Management, Social Sciences, Peace and Conflict Studies (IJMSSPCS), Vol.7 No.3 September, 2024 – Rachel Osasere Ogbeifun, Ph.D maintained that the stock market is crucial to the nation’s economic growth and development.

This is because it performs the important function of financial intermediation in the economy by taking money from the surplus units in the economy and channeling same to the deficit units in other sectors.

Titled ‘Empirical Investigation Of Stock Market Efficiency And All Share Index (ASI) Volatility In Nigeria,’ the study used descriptive statistics and inferential statistics to analyze yearly All Share Index (ASI) data generated for the period 1985 to 2021. The finding from the study showed that presence of the weak form efficient market in Nigeria. The random movement of the yearly All Share Index (ASI) indicated volatility in the Nigeria bourse in the reference period.

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Which brings us to what informed the concept of this editorial. Last week, the Nigerian Equities Market ended tradings in the negative territory, with the All-Share index shedding 681.75 points to settle at 109,028.62 as of Friday, 23rd May 2025.

Writing on the subject May 25, 2025 with a caption titled ‘Weekly Market Wrap: All-Share Index slides 0.62% on declines in premium, oil & gas and banking stocks,’ Izuchukwu Okoye lamented that the development marked a 0.62% decline from the previous week’s close of 109,710.37, fueled by sell-offs in the premium board, oil & gas, and banking stocks.

Despite the dip in prices, the market held steady just above the 109,000 level, while trading activity gathered momentum, as total weekly volume soared 16.34% to 3.03 billion shares – he enthused.

“However, market capitalization took a hit, slipping to N68.7 trillion from N68.9 trillion the week before.

“In terms of market breadth, 52 equities recorded price gains during the week, down from 61 in the previous session.

“On the flip side, 41 equities closed lower—an increase from the 31 that declined in the prior week,” Okoye informed.

He gave the market Overview; “The Nigerian stock market saw a mixed performance during the week, with the All-Share Index (ASI) experiencing modest price action early on.

“On Monday, the index slipped slightly by 12.55 points, before edging into positive territory on Tuesday with a mild gain of 32.64 points.

“However, pronounced declines set in midweek. Selling pressure intensified on Wednesday and Thursday, dragging the index below the 109,500 mark.

“Although Friday’s loss was marginal, the ASI still ended the week in the red.”

Emphasizing that the NGX Premium Index dropped by 1.15%, weighed down by an 8% decline in ACCESS HOLDINGS and sub-3% losses in MTN NIGERIA, ZENITH BANK, and UBA – the analyst noted that the NGX 30 Index also closed lower, slipping 0.50%, while the NGX Main Board Index declined by 0.35%.

This is his view on the Sector performance; “NGX Oil & Gas Index recorded the sharpest sector loss, falling 3.44%, driven by a 6.7% slump in OANDO and a 2.1% dip in heavyweight ARADEL.

“Additionally, NGX Banking Index declined by 1.52%, dragged down by a 10% drop in FIDELITY BANK, an 8% fall in ACCESS HOLDINGS, and minor losses in UBA and ZENITH BANK.

“On the upside, the NGX Consumer Goods Index posted a 2.18% gain, powered by a strong 19.5% rally in NESTLÉ NIGERIA.

“NGX Insurance Index rose by 0.73%, while the NGX Industrial Goods Index edged up 0.72%.”

Are there top gainers?The financial guru replied in the affirmative. Hear him; “Leading the charge among gainers was CUTIX, which climbed 21.92% week-to-date, followed by CUSTODIAN INVESTMENT PLC at 21.45%. Other notable gainers included:

“Red Star Express Plc: up 20.90%, N6.71. John Holt Plc: up 20.63%, N7.60. Eunisell Interlinked: up 20.47%, N12.95. Nestlé Nigeria Plc: up 19.50%, N1,590.50. Regency Assurance Plc: up 18.18%, N0.65. Linkage Assurance Plc: up 17.60%, N1.47. Tantalizers Plc: up 17.39%, N2.70 (and) eTranzact International Plc: up 15.25%, N6.80.”

Statistics of Top losers given include NEIMETH INTERNATIONAL PHARMACEUTICALS PLC which led the decline with a 17.03% drop week-to-date, followed by ASSOCIATED BUS COMPANY PLC at 15.59%.

Other notable losers included: Transcorp Hotels Plc: down 15.03%, N138.50. NPF Microfinance Bank Plc: down 12.79%, N2.25. FTN Cocoa Processors Plc: down 11.97%, N2.28 and Fidelity Bank Plc: down 10.34%, N18.65. Others are Chellarams Plc: down 9.96%, N11.75; Caverton Offshore Support Group Plc: down 9.52%, N3.80; Legend Internet Plc: down 9.52%, N7.60 and Learn Africa Plc: down 8.86%, N4.01.

Interrogating corporate actions during the week, Okoye posited that the corporate landscape was vibrant with several key announcements that captured investor attention. He spoke further; “Fidelity Bank Plc clarified its position on a recent court judgment. Linkage Assurance Plc released its Q1 financial statements. Champion Breweries Plc passed key resolutions at its Annual General Meeting (AGM).

“Seplat Energy Plc announced the exchange rate applicable to its Q1 dividend. FirstHold Plc disclosed resolutions passed at its AGM (and) Berger Paints Nigeria Plc also announced resolutions passed at its AGM.”

After reaching a peak above the 109,500 mark, the All-Share Index seems to be pulling back slightly as investors likely consider more attractive entry points in stocks that have been steadily climbing – the analyst revealed.

This is even as he explained a renewed wave of buying interest in large and mid-cap stocks which could fuel further upward momentum, potentially driving the index even higher in the coming sessions.

Towards navigating the volatility in the Equities Market, The Daily Times recommends amongst other aforementioned strategies the imperatives for investors keeping calm and carrying on – despite pyrrhic rumbles. Staying invested with professionals monitoring events is also sine qua non.

Just as it is important to understand risks involved while finding comfort zones lastly –
putting diversification to work can go a long way in assisting to get market volatility working for concerned stakeholders.