Overview:
- The NGX All Share Index (ASI) closed at a record high of 106,574.71, surpassing its previous peak of 106,087.8 set in February 2024.
- The market gained 0.65% today, reflecting sustained investor confidence and strong corporate earnings.
- Top performers included Ellah Lakes Plc (+10%), Eterna Plc (+9.93%), and Honeywell Flour Mills Plc (+9.93%).
- Worst performers included International Energy Insurance Co Plc (-9.78%) and Eunisell Interlinked Plc (-9.74%).
- Sector winners were utilities, energy minerals, and process industries, while producer manufacturing and health technology lagged.
- Nigerian bonds remained attractive, with the 2-year yield at 25.582% and the 3-year yield at 22.341%.
- The CBN maintained the MPR at 27.50% amid inflation pressures, with inflation recorded at 34.80% in December 2024.
- The exchange rate closed at 1,502.00 NGN/USD, reflecting stability amid minor fluctuations.
The Nigerian equities market extended its bullish momentum as the NGX All Share Index (ASI) closed at an all-time high of 106,574.71, gaining 0.65% for the day. This milestone broke the previous record of 106,087.8 set in February 2024, signaling sustained investor confidence and strong earnings from key sectors. The rally was driven by increased institutional participation, with foreign investors showing renewed interest in Nigerian equities. Additionally, improving macroeconomic indicators and corporate earnings reports have provided further assurance to investors. Analysts note that liquidity inflows from pension funds and asset managers have contributed to the market’s resilience. Trading volume remained high, with over 478 million shares changing hands, indicating strong buying pressure. The bullish sentiment is expected to persist in the coming weeks, supported by ongoing policy reforms and economic stability.
Leading the gainers’ chart was Ellah Lakes Plc (ELLAHLAKES), which surged by 10% to 3.63 NGN. Eterna Plc (ETERNA) and Honeywell Flour Mills Plc (HONYFLOUR) also posted impressive gains of 9.93% each, supported by robust demand in the process industries and energy minerals sectors. Investors showed heightened interest in these stocks, particularly due to strong earnings reports and favorable commodity price movements. Market analysts attributed the gains to improving sectoral fundamentals and increased liquidity inflows. On the flip side, International Energy Insurance Co Plc led the decliners, shedding 9.78% to close at 2.03 NGN, followed by Eunisell Interlinked Plc, which fell by 9.74%. These declines were driven by weaker financial performance and reduced investor confidence. Additionally, some traders engaged in profit-taking, leading to increased selling pressure on the worst-performing stocks. Overall, the market exhibited a dynamic trading session with broad-based activity across various sectors.
Sectoral performance was mixed, with utilities and energy minerals sectors outperforming, driven by renewed investor interest and improving commodity prices. The increased demand in these sectors was largely fueled by rising global energy prices and government incentives for sustainable energy investments. Additionally, infrastructure development projects have provided further support to these industries, attracting more investors. However, the producer manufacturing and health technology sectors struggled, reflecting concerns over input cost pressures and macroeconomic headwinds. Rising inflation and foreign exchange volatility have exacerbated the cost burden on manufacturers, limiting their profit margins. The health technology sector, in particular, faced supply chain disruptions and regulatory hurdles, which hindered its growth prospects. Market analysts suggest that targeted government interventions and policy support could help alleviate some of these challenges and restore investor confidence in these lagging sectors.
In the fixed income market, Nigerian government bonds remained a preferred investment choice, with the 2-year yield at 25.582% and the 3-year yield at 22.341%, reinforcing investor confidence in sovereign debt instruments. Demand for these bonds has been driven by their attractive yields compared to other investment options, particularly in a high-inflation environment. Analysts suggest that institutional investors are increasing their holdings in longer-term bonds as a hedge against inflation risks. Additionally, the strong buy sentiment in the bond market indicates continued faith in the government’s fiscal management and debt sustainability. The CBN maintained its hawkish stance, holding the Monetary Policy Rate (MPR) at 27.50% in response to rising inflation, which reached 34.80% in December 2024. This decision aligns with efforts to stabilize the naira and manage excess liquidity in the financial system. However, market participants are closely watching for any signals of future policy adjustments that may impact liquidity and borrowing costs.
The foreign exchange market remained stable, with the naira closing at 1,502.00 NGN/USD, reflecting tight monetary controls and sustained liquidity management by the apex bank. The currency’s relative stability was supported by improved foreign reserves and measured interventions by the CBN. Additionally, remittance inflows from Nigerians abroad have contributed to maintaining liquidity in the forex market. Market analysts suggest that the naira’s performance will remain dependent on global oil prices and capital inflows in the short term. The demand for dollars by importers and manufacturers continues to exert some pressure, though CBN’s proactive measures have kept fluctuations minimal. Investors will continue to monitor economic developments and corporate earnings for further market direction, especially in anticipation of potential monetary policy shifts.
Overall, the Nigerian stock market remains on a strong upward trajectory, with a historic close and sectoral resilience bolstering the outlook for continued gains in the near term. Analysts predict that investor sentiment will remain positive, supported by strong earnings reports and policy stability. The current market conditions indicate a sustained bullish phase, with institutional investors increasing their equity positions. Furthermore, improved corporate governance and regulatory frameworks are expected to enhance market confidence. The recent inflow of foreign investments also underscores the market’s attractiveness, particularly in key growth sectors. As global economic conditions evolve, Nigerian equities are well-positioned to benefit from strategic reforms and capital inflows.
