The stock market section of the Nigerian Exchange Limited (NGX) gained N4.43 trillion in the first two months of 2025 as investors take positions in blue-chip companies amid 2024 corporate earnings and dividend payout.
With the Central Bank of Nigeria (CBN) significantly dropping interest rates on Treasury bills following a decline in the country’s inflation rate, investors’ surge demand for some listed companies have played a critical role in the stock market’s N4.43 trillin increase in the period under review.
Also, the analysts had anticipated a shift to the stock market as participants in the Treasury bill market had already begun repricing yields downward despite the tight liquidity conditions in the financial system.
The stock market that opened 2025 at N62.763 trillion, gained N4.43 trillion or 7.1 per cent to close on Friday at N67.19 trillion and the growth influenced the market performance in February 2025.
THISDAY gathered that the stock market gained N1.95 trillion in January 2025, while in February 2025, it appreciated by N2.48 trillion to close at N67.193 trillion.
Consequently, the NGX All-Share Index (NGX ASI) advanced by 4.76 per cent or 4,894.99 in its Year-till-Date (YtD) performance to close yesterday at 107,821.39 basis points from 102,926.40 basis points the stock market closed for trading in 2024.
THISDAY from investigation gathered that the Banking sector recapitalisation exercise of the CNN, 2024 corporate earnings among others factors have also lifted investor expectations.
For instance, in the first two months of 2025, the NGX Banking Index led other indices when it gained 7.5 per cent YtD to close yesterday at 1,165.71basis points from 1,084.50 basis points.
On the flipside, the stock market has witnessed caution buying trading by investors, especially in the oil and gas, and insurance sub-sector.
The NGX Oil/Gas Index dropped by 5.54 per cent YtD to close at 2,561.63 basis points from 2,712.06 basis points it opened for trading, while the NGX Insurance Index depreciated by 0.24 per cent YtD from 718 basis points to close yesterday at 716.28 basis points.
With the lower inflation rate— driven by the CPI rebasing — and the MPC’s decision to hold rates in line with expectations, capital market analysts have hinted at further stock price appreciation in March 2025.
Analysts at Corodroos Research stated that, “We believe the domestic equities market might respond positively to the MPC’s decision to pause interest rate hikes as investors assess the likelihood of policy easing in the medium term.
“We also expect to see some rotation into sectors positioned for expansion in a lower-rate environment, particularly the manufacturing sector, as lower financing costs, improved input cost dynamics, and stronger consumer demand enhance growth prospects, making the sector more attractive to investors.”
The Managing Director Arthur Steven Asset Management Limited (ASAM), Mr. Olatunde Amolegbe, had said the stock market growth in 2025 is underpinned by ongoing bank recapitalisation efforts, new listings, and anticipated monetary policy easing by the CBN.
Amolegbe, highlighted Nigeria’s relative market attractiveness as a key factor in attracting increased FPI, provided stable policies are maintained.
He noted that the bank recapitalization process is set to boost investor confidence, while high-profile listings such as Nigerian National Petroleum Company Limited and Dangote Refinery are expected to enhance market liquidity and broaden investment opportunities.
The projected bullish trend in 2025 comes as investors position themselves ahead of 2024 fiscal year results and dividend declarations, particularly in the banking sector.
However, Amolegbe cautioned that the market’s performance will depend on critical factors such as the country’s economic growth trajectory, monetary policy direction, and corporate earnings results.
