Nigeria’s equities market suffered a sharp decline on Tuesday as investors sold off shares valued at about N1.879 trillion amid preparations for the upcoming Initial Public Offer (IPO) of Dangote Petroleum Refinery.

The decline ended a three-day positive run on the Nigerian Exchange Group (NGX), with market participants repositioning their portfolios ahead of the refinery’s share offering.

Investors Move Funds Ahead of Dangote IPO

Managing Director of Globalview Capital Limited, Aruna Kebira, said the market decline was largely driven by investors seeking liquidity to participate in the Dangote Refinery IPO.

He explained that many investors were reducing their existing stock positions to raise cash for the offer.

According to him, the heavy selling pressure created an imbalance between sellers and buyers.

“Preparations for the Dangote Refinery IPO caused the downturn in performance today,” Kebira said.

He added that selling activity significantly exceeded buying activity during the session.

IPO Expectations Influence Market Sentiment

Kebira said investor interest in the Dangote Refinery share offer had moved beyond speculation following the formal commencement of IPO activities.

He noted that the transaction had become a confirmed market event after the signing ceremony, with the offer expected to open on September 14.

“The idea was muted before, but now the signing ceremony has been held and the offer is expected to open on the trading floor on Sept. 14. So, it is no longer a rumour,” he said.

Market Capitalisation Drops to N158.72tn

The broad sell-off reduced the total market capitalisation of listed companies on the Nigerian Exchange from N160.600 trillion to N158.721 trillion.

This represented a decline of N1.879 trillion, equivalent to a 1.17 per cent drop.

The All-Share Index (ASI), the key benchmark for market performance, also declined by 2,897.67 points or 1.17 per cent.

The index moved from 247,699.78 points to 244,802.11 points.

Majority of Stocks Close Lower

The trading session reflected widespread losses, with 64 stocks recording declines compared with only four gainers.

The market’s year-to-date return stood at 57.31 per cent despite the day’s negative performance.

Among the biggest losers were: FG162029S1, which declined by 31.19 per cent to close at N75, AVA Capital, which fell 10 per cent to N5.40., Fortis Global Insurance, which dropped 9.89 per cent to N1.64.

Other declining stocks included: Abbey Mortgage Bank, down 9.74 per cent, Critical Minerals Financing Corporation, down 9.66 per cent.

Few Stocks Record Gains

Despite the general market decline, some companies recorded gains.

Ellah Lakes Plc led the gainers’ list with a 7.07 per cent increase, closing at N9.85.

Other gainers included: Nigerian Exchange Group, which gained 1.38 per cent to N131.90., Learn Africa Plc, which rose 1.16 per cent to N8.75, Wema Bank Plc, which gained 0.68 per cent to N29.70.

Trading Activity Increases

Although prices declined, market activity increased during the session.

Total shares traded rose by 84.67 per cent to 753.17 million shares, valued at N27.83 billion across 54,051 deals.

NEM Insurance Plc recorded the highest trading activity, with 131.73 million shares worth N4.07 billion exchanged.

The company accounted for: 17.49 per cent of total trading volume, 14.63 per cent of total market value.

An IPO allows a private company to sell shares to the public for the first time.

Before major IPOs, investors may: Investors sell existing shares to finance participation.

Funds may move from other stocks into the new opportunity.

Large investors often reposition based on expected returns.

The temporary decline does not necessarily indicate weakness in the overall market but reflects changing investor priorities.