Nigerian Exchange Records First Gain in March – A Sign of Renewed Investor Confidence?

The Nigerian Exchange (NGX) ended its losing streak on Thursday, recording its first gain in March as renewed investor interest lifted the market capitalisation by N216 billion to N66.9 trillion. This rebound, while modest, raises the question: is the market showing signs of recovery, or is this just a temporary rally?

Market Performance: A Closer Look

The All-Share Index (ASI) rose by 344.24 points (0.32%), closing at 106,780.72 points. However, despite this gain, the index still reflects a one-week decline of 0.83%, suggesting that market sentiment remains cautious. On a broader scale, it maintains a four-week increase of 1.28% and a year-to-date gain of 3.74%, signalling overall market stability amid fluctuations.

Trading activity was relatively paused, with 375.7 million shares worth N10.18 billion exchanged across 11,447 deals—a 4% decline in volume and a 10% drop in turnover compared to the previous session. While the rebound suggests a return of buyer confidence, the lower trading volume raises questions about the strength of this recovery.

While these gains indicate pockets of strength, the broader market still faces headwinds, particularly from declining turnover and external economic factors.

Looking Ahead: Recovery or a Temporary Bounce?

Thursday’s gain follows a sharp N289 billion loss in market capitalisation on Wednesday, when the NGX closed at N66.7 trillion. While the rebound is encouraging, it remains to be seen whether it marks a sustained recovery or a temporary rally driven by bargain hunters.

With global economic uncertainties, inflationary pressures, and monetary policy decisions playing a key role, investors should watch for sustained trading volume, corporate earnings releases, and macroeconomic indicators to gauge the market’s next direction.

For now, while Thursday’s gain is a positive signal, the market still has hurdles to clear before confirming a full recovery.