Nigerian Stocks Extend Rally as Market Gains N1.45 Trillion on Renewed Investor Confidence

By [Omu Fidelis]

The Nigerian Exchange (NGX) maintained its positive momentum on Wednesday as investors’ renewed appetite for blue-chip equities pushed the market capitalization higher by N1.446 trillion, representing a 0.50% gain, to close at N97.58 trillion.

The rally was largely driven by strong performances in key stocks such as Aso Savings, Skyway Aviation Handling Company (SAHCO), UPDC Real Estate Investment Trust (REIT), Nascon Allied Industries, and Dangote Cement.

Similarly, the All-Share Index (ASI) appreciated by 2,279.34 points, or 0.50%, to settle at 153,736.25 points, up from 151,456.91 recorded on Tuesday. This upward movement boosted the year-to-date (YTD) return to 49.37%, reflecting sustained investor confidence despite economic headwinds.

Market Sentiment Remains Strong

Market breadth closed positive with 32 gainers against 31 losers, indicating strong trading sentiment across sectors.

Among the top gainers, Aso Savings led with a 10% rise to close at 55 kobo, followed by Skyway Aviation Handling, which appreciated 9.99% to N99.05. UPDC REIT climbed 8.16% to N7.95, Nascon advanced 6.80% to N110.00, while Dangote Cement rose 6.50% to N639.00 per share.

On the flip side, The Initiates Plc recorded the highest loss, declining 5.73% to N13.00, followed by Legend Internet, which fell 5.69% to N5.80. Royal Exchange dropped 4.76% to N2.20, Champion Breweries shed 4.49% to N14.90, and AXA Mansard declined 4.19% to N16.00.

Trading Volume and Turnover Rise

Trading activity improved as investors exchanged 589.5 million shares valued at N24.01 billion across 28,485 deals, showing an increase in volume, value, and deal count by 7%, 17%, and 4%, respectively, compared to the previous session.

Fidelity Bank led the activity chart with 94.74 million shares worth N1.87 billion, followed by GTCO, which traded 79.5 million shares valued at N7.4 billion. Access Corporation recorded 59.4 million shares worth N1.5 billion, while Zenith Bank and Jaiz Bank transacted 23.98 million and 22.37 million shares, respectively.

Self-Analysis: What the Rally Means for Nigeria’s Economy

The continued bullish run on the NGX signals a renewed wave of investor optimism, particularly in response to improving sentiment around Nigeria’s monetary and fiscal policies.

Several factors appear to be fueling this rally:

1. Investor Repositioning: As interest rates stabilize and inflation shows signs of moderation, investors are moving funds back into equities for better long-term returns.
2. Corporate Earnings Strength: Companies like Dangote Cement, Nascon, and major banks have posted resilient earnings, reinforcing confidence in Nigeria’s leading corporates.
3. Sectoral Rotation: The surge in real estate and industrial stocks suggests investors are betting on infrastructural expansion and construction-led growth.

However, this market momentum must be viewed cautiously. Despite record-high capitalization, liquidity pressures, inflationary costs, and currency volatility remain potential risk factors that could temper further gains.

From a macroeconomic standpoint, the rally demonstrates that investors still view Nigeria’s stock market as a profitable hedge against naira depreciation, especially as foreign participation gradually returns following market reforms.

If the bullish sentiment continues, the NGX could see more listings, mergers, and capital inflows, thereby strengthening its role as a key funding source for private and public sector expansion.

Outlook

Analysts project that sustained reforms in the financial and energy sectors, coupled with stability in government policy, will be critical in maintaining the current trajectory. As Nigeria seeks to diversify its economy, the stock market’s performance serves as both a barometer of investor confidence and a catalyst for capital formation.