Kayode Tokede 

The equities market section of the Nigerian Exchange Limited (NGX) recorded a significant increase in investments, with a gain of N13.2 trillion in the first half (H1) 2025.

This growth reflects investor confidence and a positive market trend. The market capitalisation gained N13.2 trillion from N62.763 trillion at the beginning of the year to close at N75.962 trillion at the end of June 27, 2025.

Similarly, the Nigerian Exchange Limited All-Share Index (NGX  ASI) rose by 16.58 per cent from 102,926.40 basis points on December 31, 2024 to 119,995.76 basis points on June 27, 2025.

The market’s strong performance is attributed to a combination of positive investor responses to mixed corporate earnings and ongoing federal government reforms.

From a sectoral standpoint as at June 27, 2025, performance was predominantly bullish. The NGX Consumer Goods index emerged as the best-performing sector by 51.02 per cent in H1.

NGX Pension index achieved a growth of 28.95 per cent, while NGX Premium index rose by 19.54 per cent in H1.

NGX Banking, NGX 30, NGX Insurance and NGX Industrial Goods posted a growth of 19.36 per cent, 16.22 per cent, 4.50 per cent and 2.27 per cent respectively in H1. On the other hand, the NGX Oil and Gas index registered a decline by 9.86 per cent.

Commenting on the market performance, the CEO, Sofunix Investment and Communications, Mr. Sola Oni said the Nigerian stock market performance is influenced by company results, demand and supply, and market sentiment.

He said, “Recently, several listed companies have reported strong earnings and announced bonus shares, contributing to relative economic stability. Despite this, many blue-chip stocks on the NGX remain undervalued compared to their intrinsic worth.

“Foreign portfolio investors often capitalize on these opportunities, driving up the All-Share Index and market capitalization. However, they can also swiftly withdraw their investments in response to policy inconsistencies.”

Oni, who is also a Chartered Stockbroker added, “The market’s forward-looking nature means investors focus on companies’ future prospects rather than current performance. Fortunately, the market has a self-correcting mechanism that adjusts stock prices to their true value over time.

“A recent example of the market’s responsiveness to public information was the impact of the Central Bank of Nigeria’s (CBN) circular on banks’ forbearances, Single Obligor Limit (SOL), suspension of dividend payment and bonus shares to management staff till 2028 and halt to investment in foreign companies.

“Initially, the market reacted negatively by dumping banks’ shares. But a subsequent clarification halted the decline and reversed losses. This highlights the importance of clear communication and consistent policy implementation in maintaining market stability.”

Speaking on expectations for the market in H2, analysts at United Capital Plc said: “The equities market might continue in its upward trend leading to a slight gain in the ASI. This is hinged on the market benefiting from the excess liquidity in the financial system. Similarly, investors might start positioning for Q2-earning season, favoring corporates with FX gains, cost control, clear growth trajectory, and those with potentials for quality interim dividend payment.”

Theyadded, “On the flip side, a potential OMO auction might reduce the inflow of funds into the equities market as elevated yields keep investors anchored to the fixed income market instruments. Similarly, positive sentiments will be moderated by elevated inflation, heightened interest rate, weak naira and general uncertainty in the global and domestic macroeconomic space. We expect retail investors to continue to take profit from the previous week’s gains, tactically slowing the upward movement of the equities market. We advise investors to cherry pick fundamentally sound stocks with potential for interim dividend payment.”

Similarly, analysts at Cowry Assets Manangemnt Limited stated that, “We expect the coming week to be somewhat cautious. With the market appearing to be in overbought territory, there could be mild profit-taking, particularly in some of the large-cap stocks. This pullback, however, may be a healthy one, as it could help the market consolidate recent gains and build strength for a possible further breakout.”

They added, “As the end of the second quarter approaches, we are also seeing signs of quarter-end window dressing and bargain hunting, especially as investors begin to anticipate earnings reports and policy signals from the Central Bank of Nigeria’s upcoming July meeting. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks that offer long-term value and earnings resilience, especially amid the evolving macroeconomic environment.”