The Structural Friction of Index Concentration
The fragility of the index weighted advance
Written by Olumide Olusegun, Founder & Managing Director, Splitbox Limited.
The Structural Friction of Index Concentration.
Splitbox Journal • What Everyone Missed
The Ghost Rally of Index Concentration.
Nominal market expansion is currently a lie. While the Nigerian equities market added N191.77 billion in a single session, this growth is a function of index weighting rather than economic health.
Market breadth is negative. Thirty-five stocks declined while only twenty-two rose. A few heavyweights like First HoldCo are dragging the index upward while the majority of listed companies lose value.
The signal is in the turnover. A 19.68 percent drop in volume proves that liquidity is exiting the market. Price gains on falling volume reveal a total absence of conviction.
Stop using the ASI to measure market health. The advance-decline ratio is the only metric that captures the reality of institutional caution in Lagos.
Read more founder insights: splitboxltd.com
— Splitbox Journal
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