Despite a shortened trading week caused by the Federal Government’s declaration of Monday and Thursday as public holidays, investors on the Nigerian Exchange Limited (NGX) defied market downtime to record impressive gains exceeding ₦500 billion. The All-Share Index (ASI) rose by 0.71% week-on-week to close at an unprecedented high of 115,429.54 points, while market capitalisation soared by ₦512.52 billion, settling at ₦72.79 trillion.
The development pushed the year-to-date return to 12.15%, reinforcing investor confidence in Nigerian equities despite broader economic concerns and limited trading sessions.
In a week where investors only had three active trading days, market breadth remained positive with 55 gainers outpacing 39 losers, reflecting broad-based buying interest. Analysts attributed this to the comparative advantage equities now hold over fixed-income securities and money market instruments, which currently offer less attractive returns in light of rising inflation.
However, trading activity was relatively subdued. The volume of traded shares dropped by 35.77% to 2.05 billion, while the value of transactions also fell by 32.31% to ₦50.68 billion. Notably, the number of deals rose by 1.47% to 64,702, indicating continued activity and interest in small- and mid-cap stocks among retail investors.
Sectoral indices showed mixed performances throughout the week. The oil and gas sector dipped by 1.22% following sell-offs in key stocks such as Conoil and Aradel. Similarly, the insurance index fell marginally by 0.11%, dragged by losses in Wapic Insurance and Cornerstone.
The commodity sector recorded the steepest decline at 1.41%, due largely to decreased interest in agricultural-related equities. Conversely, the consumer goods and industrial goods sectors emerged as top performers, buoyed by renewed demand for fundamentally strong stocks like Berger Paints, Ella Lakes, May & Baker, Honeywell Flour Mills, and Dangote Sugar Refinery.
The industrial sector also received a boost from BUA Cement, a blue-chip stock that continues to enjoy positive investor sentiment, reinforcing faith in Nigeria’s large-cap stocks.
Meanwhile, the banking sector closed the week flat. While Tier-2 banks saw modest gains, negative sentiment around Tier-1 banks weighed down overall performance. Market analysts attribute this to investors exercising caution ahead of Nigeria’s forthcoming inflation data and a possible change in monetary policy.
According to Cowry Asset Management, the market’s resilience is likely to continue, particularly with the upcoming release of May 2025 inflation figures. They noted that a positive inflation surprise could reinforce investor appetite for equities, shifting attention away from fixed-income instruments.
However, they warned of intermittent profit-taking as investors recalibrate their portfolios after recent rallies.
Cordros Capital also provided insights into Nigeria’s trade dynamics, projecting a sustained rebound in domestic crude oil production. While this would boost export volumes, they noted that softened global oil prices might limit the upside in the medium term.
“Looking ahead, we anticipate continued recovery in domestic crude oil production. However, softer oil prices are expected to limit the upside in the medium term, which may dampen growth in total exports,” the Cordros team stated.
They also forecast that increased domestic refining capacity would help reduce oil imports, but rising consumer demand and improved forex liquidity could fuel non-oil imports, potentially neutralising any net trade surplus.
Despite the volatility surrounding economic indicators and global oil dynamics, analysts maintain a constructive outlook on the Nigerian capital market. With the ASI hitting historic highs and investor confidence firming up, equities remain a compelling option for both institutional and retail investors.
Market watchers suggest a focus on fundamentally strong stocks with consistent earnings and resilient dividend histories. Investors are advised to monitor upcoming inflation reports, exchange rate policies, and corporate earnings to refine their investment strategies.
As the market navigates global headwinds and domestic reforms, the NGX’s performance continues to offer a glimpse into investor optimism and the market’s ability to weather macroeconomic uncertainties.