Underperforming Stocks in Nigeria 2024

Even though the Nigerian Exchange (NGX) recorded a 30.40% market return as of November 30, not all stocks performed well. Some sectors and companies struggled this year, showing poor results despite the overall market growth.

Biggest Losers
UPDC was the worst-performing stock, losing 76.72% of its value. Multiverse followed with a decline of 68.23%, and MTNN dropped by 35.61%. Other struggling stocks included Daar Communications (-32.22%), Thomas Wyatt (-29.26%), CWG (-28.31%), Secure Electronic Technology (-25.68%), Omatek (-19.74%), and Tripple Gee (-12.56%).

Sector Performances
In the consumer goods sector, Dangote Sugar Refinery had the biggest loss, with its value falling by 38.60%. Nascon also dropped by 38.52%, and other big names like Nigerian Breweries (-21.57%), International Breweries (-16.67%), Nestle (-22.73%), and Northern Nigeria Flour Mills (-25.82%) also struggled. Even popular brands like PZ Cussons (-17.42%) and Guinness (-6.06%) saw losses.

In the healthcare sector, Fidson Healthcare fell by 12%. In the banking sector, Stanbic IBTC Holdings recorded a significant drop of 22.47%. The oil and gas sector saw the newly listed Aradel lose 26.43% of its value. In the industrial goods sector, Beta Glass fell by 16.41%, Austin Laz dropped by 3.4%, and BUA Cement slipped slightly by 2.06%.

What’s Causing These Losses?
Analysts believe that the continuous increase in Nigeria’s interest rate (Monetary Policy Rate or MPR), which is now at 27.50%, has made fixed-income investments like Treasury bills more attractive to investors. This shift has caused less interest in stocks, especially weaker ones.

Investor Sentiment
As the year ends, many investors are cautious. Some are selling off poorly performing stocks, while others are looking for undervalued ones with strong growth potential. Analysts suggest that these undervalued stocks could give good returns in the long term.

Opportunities Ahead
Even with the challenges, there are opportunities for smart investors. Analysts believe that any drop in the prices of strong-performing stocks could be a chance for investors to buy at lower prices. Fund managers also see the potential for good returns in the future if investors focus on stocks with strong fundamentals and growth potential.