The Nigerian equities market continued its strong momentum in early June 2025, as bullish sentiment among investors pushed the Nigeria Exchange (NGX) market capitalization past the ₦71 trillion ($45 billion) mark. This rise signals renewed confidence in the country’s stock market amid positive macroeconomic developments and corporate earnings reports. Key stocks such as Oando Plc, Guaranty Trust Holding Company (GTCO), and May & Baker Nigeria led the rally, driving market gains across several sectors.

Market Summary: All-Share Index Climbs Amidst Positive Sentiment

On June 5, the NGX All-Share Index (ASI) closed at 112,781.73 points, registering a gain of 354.25 points or 0.32%. Correspondingly, the total market capitalization rose by ₦233 billion to close at ₦71.118 trillion, approximately $45 billion based on current exchange rates. This marks an important milestone, reflecting sustained investor interest and confidence in Nigeria’s capital markets.

The positive price action was supported by gains in 32 stocks, outweighing losses in 21 others. This broad market participation underscores a healthy market breadth, indicating that the rally is not confined to a handful of blue-chip stocks but is more widespread across various sectors.

Key Gainers Driving the Market Rally

The equities market performance was buoyed by gains in large and mid-cap stocks that are often regarded as bellwethers for the broader economy:

• Oando Plc: The energy giant led price gainers with a 10% increase to close at ₦51.70 per share. Oando’s resurgence comes amid optimism over Nigeria’s oil and gas sector, bolstered by improving global crude prices and ongoing reforms within the energy industry. Learn more about Oando Plc.
  
• PZ Cussons Nigeria Plc: Benefited from improved consumer sentiment and increased demand for its personal care and household products, driving its share price higher.
  
• Guaranty Trust Holding Company (GTCO): The banking sector heavyweight continued to attract investors, trading 87.204 million shares valued at ₦5.952 billion. GTCO’s strong performance is linked to robust financial results and digital banking initiatives. GTCO official site.
  
• May & Baker Nigeria Plc: Pharmaceutical stock May & Baker gained 6.56% to close at ₦13.80, supported by steady demand for healthcare products amid Nigeria’s growing population and expanding healthcare sector.
  
• First Holdco Plc: This conglomerate also contributed to the upward momentum with notable price appreciation.

Other notable winners include Royal Exchange Plc (+8.64%), Legend Internet (+7.27%), and Lasaco Assurance (+6.67%), showing positive investor reception across insurance and technology sectors.

Stocks That Experienced Declines

While the majority of the market recorded gains, some stocks faced downward pressure:

• NCR Nigeria Plc: Led the losers with a 9.89% decline to close at ₦5.92 per share. NCR’s slump reflects sector-specific challenges and investor caution.
  
• ABC Transport Plc: Fell by 9.83% to ₦2.95, possibly affected by disruptions in the transport sector and economic headwinds.
  
• Meyer Plc: Experienced a 9.63% depreciation to ₦8.45.
  
• Academy Press Plc and Livestock Feeds Plc also recorded losses of 9.58% and 6.77% respectively, highlighting mixed performance within manufacturing and agribusiness sectors.

Trading Volume and Market Activity

Despite the market gains, total traded volume fell slightly by 1.86% to 611.527 million units, valued at ₦16.680 billion, transacted across 13,682 deals. The slight dip in volume suggests investors are becoming selective, focusing on quality stocks while exercising caution on more speculative plays.

Top traded stocks by volume and value were dominated by financial institutions, demonstrating continued confidence in Nigeria’s banking sector:

• Fidelity Bank Plc: Led in trading volume with 93.467 million shares exchanged, valued at ₦1.776 billion. Fidelity Bank’s active trading reflects investor appetite for solid banking fundamentals and expanding retail banking services.
  
• Guaranty Trust Holding Company (GTCO): Traded 87.204 million shares worth ₦5.952 billion, confirming its status as a market favorite.
  
• Royal Exchange Plc: Traded 73.079 million shares valued at ₦64.92 million, reflecting heightened interest in the insurance sector.
  
• United Bank for Africa (UBA): The pan-African banking giant traded 57.114 million shares valued at ₦1.980 billion, maintaining its position among the most actively traded stocks. 
• Access Holdings Plc: Exchanged 38.760 million shares worth ₦854.588 million, continuing to attract investor attention amid its expanding banking footprint.

Broader Economic Context and Outlook

Macroeconomic Drivers Supporting Market Growth

Nigeria’s equities market performance is closely linked to the country’s macroeconomic fundamentals. The Central Bank of Nigeria (CBN) has played a pivotal role in stabilizing the economy through prudent monetary policy, helping to keep inflation within manageable levels and supporting exchange rate stability.

The Nigerian government’s focus on fiscal reforms, including improved revenue collection and expenditure management, has strengthened investor confidence. Furthermore, ongoing economic diversification efforts aimed at reducing dependence on oil revenue are gradually showing impact, with increased activity in agriculture, telecommunications, and manufacturing sectors.

Impact of Global Oil Prices

Nigeria remains one of Africa’s largest oil producers, making its economy and stock market sensitive to crude oil price dynamics. After a period of volatility in 2024, global oil prices have stabilized and trended upward in 2025, supported by demand recovery and supply discipline by major producers.

Higher oil prices have a dual effect: improving government revenues and strengthening the profitability outlook for energy-linked stocks such as Oando Plc. This, in turn, bolsters market sentiment and attracts foreign portfolio investments.

Foreign Investor Participation

Foreign investor activity, though fluctuating over recent years due to geopolitical risks and global economic uncertainties, remains a significant driver of liquidity and market depth on the NGX. Recent months have seen cautious but positive inflows, encouraged by Nigeria’s improving macroeconomic indicators and relatively attractive dividend yields.

The Nigerian Exchange Group has also enhanced its market infrastructure and investor protection frameworks, making it more appealing to both local and international investors. These include improvements in trading technology, market transparency, and regulatory oversight by the Securities and Exchange Commission (SEC).

Sectoral Performance Highlights

Banking Sector

The banking sector, which constitutes a major portion of the NGX market capitalization, showed resilience and positive momentum. Strong earnings reports, driven by improved loan books and reduced non-performing loans (NPLs), have helped banks like GTCO, UBA, Access Holdings, and Fidelity Bank maintain investor confidence.

Digital banking initiatives and expanded financial inclusion efforts are also attracting new customers, enhancing profitability and valuations.

Consumer Goods and Healthcare

Companies such as PZ Cussons Nigeria and May & Baker Nigeria benefit from Nigeria’s growing middle class and rising consumer demand. The healthcare sector, in particular, is poised for growth given the government’s focus on improving healthcare infrastructure and the expanding pharmaceutical market.

Insurance and Technology

The insurance sector, represented by stocks like Royal Exchange and Lasaco Assurance, showed robust gains, reflecting growing awareness of insurance products and increased policy uptake.

Technology and internet-based firms, including Legend Internet, are beginning to gain traction, capitalizing on the digital transformation trend across Nigeria.

Risks and Considerations

Despite the optimistic market sentiment, investors remain mindful of several risks that could affect the trajectory of the Nigerian equities market:

• Inflationary Pressures: Persistent inflation could erode real returns and affect corporate earnings.
  
• Exchange Rate Volatility: Fluctuations in the naira’s value can impact foreign investment and the cost structure of listed companies.
  
• Political and Policy Risks: Upcoming elections and potential policy shifts may introduce uncertainties.
  
• Global Economic Headwinds: Slowdowns in major economies and geopolitical tensions could affect foreign capital flows.
  

Conclusion: A Market on the Rise Amid Opportunities and Challenges

The Nigerian equities market’s milestone of ₦71 trillion ($45 billion) market capitalization reflects growing investor optimism and improved economic fundamentals. While challenges persist, the Nigerian market offers significant opportunities, especially in banking, consumer goods, and energy sectors. Strategic reforms, combined with macroeconomic stability and infrastructure enhancements, are expected to sustain this positive momentum.

Investors seeking exposure to Africa’s largest economy are encouraged to monitor market developments closely, balancing growth prospects with risk management.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

9th June, 2025