Why Did Insurance Index Drop 2.9% In The Nigerian Stock Market?

Last week on the Nigerian stock market, we saw some ups and downs in various sectors. The Insurance sector didn’t do well last week. It was the biggest loser, dropping by 2.9 percent. 

This happened because people were selling more insurance-related shares, and two specific insurance companies, Cornerstone Insurance and CHIPLC, saw their share prices fall by a lot – 11.4% and 11.3%, respectively.

The Industrial Goods sector also had a bit of a tough time, with a 0.5 percent decrease. This was because the share price of a company called CAP went down by 2.2 percent. These are companies that make things like cement, paints, and other building materials.

The Oil and Gas sector didn’t escape the rough patch either. It saw a small decline of 0.1%. The reason behind this was that the shares of Eterna Plc lost some value, dropping by 3.4%. This sector includes companies involved in oil and gas exploration, production, and distribution.

But, the Banking and Consumer Goods sectors did pretty well. Several companies in these sectors saw their share prices go up. 

For instance, Zenith Bank, Ecobank TransNational Incorporated, PZ Cussons, and Cadbury all had their share prices increase, which contributed to the overall positive performance of these sectors.

Now, let’s talk about how much trading activity happened. Last week, there were a lot of shares bought and sold. 

People traded 2.6 billion shares, and these shares were worth a total of N45.5 billion (in Nigerian Naira). This was more than the previous week when there was less trading activity.

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The Financial Services sector was the busiest, with people trading 1.6 billion shares worth N20.9 billion in about 18,686 deals. This sector includes banks and other financial companies. 

The Oil and Gas sector was next in line, with 385.5 million shares worth N4.7 billion changing hands. The Consumer Goods sector came third, with 221.6 million shares worth N12.7 billion traded.

Oando Plc, Fidelity Bank Plc, and United Bank for Africa Plc were the top three companies people were trading. Together, they made up 27 percent of the total trading activity.

However, the overall stock market performed well. The All-Share Index, which is like a measure of how well all the companies are doing, went up by 0.9%. It closed the week at 68,143.34 points, and the total value of all the companies listed on the exchange was N37.295 trillion.

The people who had investments in these companies saw their investments grow. In fact, for the month and year up to that point, the gains were +2.4% and +33.0%, respectively.

However, not all sectors saw gains. The Insurance, Oil and Gas, Industrial Goods, Growth, and Sovereign Bond indices had some losses. These are like different categories of companies, and they didn’t perform as well as the others.

Analysts are feeling positive about the future. They believe that investors are getting ready to invest more in well-established companies and those that pay dividends, especially with the anticipation of third-quarter interim dividend announcements.