##NGX dips as market value falls again

##NGX dips as market value falls again

Barely 48 hours after the Dangote IPO closed, the Nigerian Exchange took on a decline trend.
The Nigerian Exchange recorded a sharp decline as overall market capitalization fell to N164.19tn from ₦164.91tn.
Similarly, the All-Share Index dropped by 1,107.28 points, closing at 252,882.78 points down from Tuesday’s peak of 253,990.06 points.
## the market drop and key figure
The recent drop on the Nigerian Exchange (NGX) saw overall market capitalization reduced to ₦164.19 trillion, resulting in an immediate midweek temporary loss of approximately ₦718.95 billion for investors.
The benchmark All-Share Index (ASI) shed 1,107.28 points during the contraction, closing down at 252,882.78 basis points. Despite this decline, the broader landscape looks promising, with the market maintaining a positive year-to-date return hovering around 62% far outpacing the inflation rate.
why shares can fall even without panic
As an equity mutual funds holder, i will say a decline like this does not essentially spell doom for the NGX and investors alike, a decline in the stock market can be attributed to a number of factors which include:
- Profit taking: the decline may result from investors who may be taking out their gains in stocks that have performed well.
- Competing yields: alternative investment such as Treasury bills with attractive competitive rate can draw money from stocks.
- Poor performance of heavyweight stocks: a few large caps; mostly the industrial stocks, can drag the entire index down when they are poorly performed.
- Furthermore, an unverified analyst attributed the decline to the heightened middle east tensions
What beginners should watch next week
Here is a simple recommendation i will give beginners who just witnessed the NGX drop this past week. This coming week(being the final quarter) will be essential.
- IPO Refund Money
When the Dangote IPO closed on the 27th last month, it was said to have been overly subscribed. Those who for instance applied for N1m were said to only get half or a quarter of that money. In essence, many subscribers will only get half of their subscription. The rest - estimated N4trnrplus - will be refunded to subscribers bank account this week.
When this happens, investors should buy back shares they initially sold. This, in my opinion, will put more money into the NG stock market.
- Avenue to buy more
Beginners should stay invested and commit more of their funds into their existing stocks.
They have nothing to worry about as long as the fundamentals of their chosen companies remain unchanged. Good opportunities often appear when stock markets fall.