- The NGX All Share Index (ASI) reached a new all-time high of 107,822.51, marking a 1.17% increase from the previous close.
- Market rally fueled by strong investor confidence, led by consumer services, finance, and energy sectors.
- Inflation remains elevated at 34.8%, but liquidity in the market remains robust.
- The naira depreciated slightly, closing at ₦1,513.10/$ in the official market.
- Bond yields remain high, with the Nigeria 2-Year bond trading at 25.07%.
The Nigerian Stock Exchange (NGX) continues its bullish momentum as the All Share Index (ASI) records yet another all-time high, closing at 107,822.51 on February 12, 2025. This marks a 1.17% gain from its previous close of 106,574.71, driven by strong market sentiment and increased institutional participation. The market capitalization surged in tandem, reflecting growing investor appetite for equities.
Sectoral Performance: Energy and Consumer Services Lead the Rally
Leading the charge in the latest rally were consumer services, finance, and energy stocks. Notable gainers include IKEJA HOTEL PLC, which gained 10%, VFD GROUP PLC at 10%, and HONEYWELL FLOUR MILLS PLC, up 9.99%. The hospitality sector also saw significant interest, with TRANSCORP HOTELS PLC climbing 9.99%. Increased tourism and consumer spending have bolstered demand in the hospitality industry, driving revenue growth for hotels and related service providers. Furthermore, renewed investor interest in consumer-oriented stocks signals confidence in Nigeria’s post-pandemic economic recovery. The finance sector continues to attract substantial investment, with banking stocks benefiting from rising interest rates and improved loan performance. Additionally, corporate earnings reports have reflected stronger-than-expected profitability, further reinforcing market optimism. Analysts note that the current trend suggests sustained momentum in these key sectors as market conditions remain favorable.
Meanwhile, energy stocks experienced a robust performance, with ETERNA PLC posting a 9.93% gain. Analysts attribute the rally in energy stocks to increased oil price stability, as Nigeria’s reference crude oil spot price closed at $74.72 per barrel in December 2024.
On the flip side, technology and financial services stocks bore the brunt of market corrections. COMPUTER WAREHOUSE GROUP PLC (CWG) recorded the sharpest loss, declining 8.95%, followed by REGENCY ALLIANCE INSURANCE PLC, which fell 7.89%.
Macroeconomic Context: Inflation and Currency Pressures
Despite the bullish stock market, Nigeria’s economic fundamentals remain under scrutiny. The latest inflation data shows a year-on-year rate of 34.8%, unchanged from December 2024. High inflation is raising concerns about real returns on investments, yet investors remain optimistic about equity markets, preferring stocks as a hedge against inflation.
The naira saw some pressure in the foreign exchange market, closing at ₦1,513.10/$, a slight depreciation from ₦1,502.00/$ the previous day. The exchange rate volatility continues to be a key challenge, with monetary authorities working to stabilize the currency amid strong demand for forex.
Interest Rates and Bond Market
The fixed-income market remains attractive for investors looking for high yields. The Nigeria 2-Year bond held steady at 25.07%, while the Nigeria 3-Year bond rose to 22.2%. The Central Bank of Nigeria’s Monetary Policy Rate (MPR) stands at 27.50%, reflecting the apex bank’s continued tightening measures to curb inflationary pressures. Investors are also closely monitoring developments in the bond market, particularly as government securities continue to provide attractive real returns amid inflationary concerns. Market participants expect continued demand for long-term instruments, given the limited alternative investment options available in the fixed-income space. Moreover, foreign portfolio inflows into Nigerian bonds have remained steady, with global investors seeking higher yields in emerging markets. Despite elevated yields, concerns over liquidity constraints and refinancing risks in the sovereign debt market persist, adding another layer of complexity to fixed-income investments.
Market Outlook: Can the Rally Be Sustained?
Analysts suggest that the current bull run may continue in the near term, supported by strong corporate earnings expectations and improved liquidity. The NGX 30 Index, which tracks the 30 most capitalized stocks, also closed higher at 3,999.19, posting a 1.22% gain.
However, risks remain. The upcoming release of GDP growth data for Q4 2024, expected on February 21, 2025, will provide a clearer picture of the economy’s trajectory. The previous quarter showed a 10% growth rate, a significant improvement from the stagnation recorded earlier in the year.
Conclusion
With sustained investor confidence and sectoral leadership from energy and consumer services, the NGX ASI’s record high underscores Nigeria’s stock market resilience. The persistent bullish sentiment is further fueled by increased corporate earnings, strategic mergers, and expanded foreign investments. However, macroeconomic headwinds such as inflation, forex volatility, and monetary policy will continue to shape market movements in the coming weeks. Investors will closely watch upcoming fiscal policy decisions and monetary tightening measures, which could influence future capital flows. Additionally, sectoral performance disparities may emerge as different industries react differently to evolving economic conditions.