By Daniel Wesonga, Senior Sales Manager at Pepperstone
Nigerian equities continue to lose momentum, with market breadth showing weakness on Friday. Nine sectors ended in negative territory, three were unchanged, and only six advanced. Most blue-chip stocks were flat as the market remained cautious. Guaranty Trust Holding and Zenith Bank were among the few gainers, while MTN Nigeria Communications, International Breweries, and United Bank for Africa closed lower.
Nigeria’s structural challenges weigh on confidence, particularly the country’s troubled port system. Despite having six major seaports, trade flows remain concentrated in Lagos via Apapa and Tin Can, leading to chronic congestion, inflated logistics costs, and weaker competitiveness. This inefficiency directly affects listed companies dependent on trade and distribution: consumer goods firms face higher costs, while manufacturers struggle with delays. As a result, sectors tied to imports, exports, and industrial activity are likely to see valuations pressured until port infrastructure modernizes.
Meanwhile, headline inflation eased for a fourth consecutive month to 21.88% in July, supported by a softer core basket. If the slowing inflation trend continues, market expectations could lean toward a softer monetary policy and could support the market. At the same time, improving private sector activity, with the PMI climbing to 54.0 in July, could support the market and help limit any corrections.