Key Highlights:
- NGX All Share Index closed at 107,670.98, declining 0.25% on the day.
- Top 5 gainers included Consolidated Hallmark Holdings Plc (+9.76%), SUNU Assurances Nigeria Plc (+9.58%), and Neimeth International Pharmaceuticals Plc (+8.77%).
- Top 5 losers saw The Initiates Plc (-9.89%), Union Dicon Salt Plc (-9.82%), and UPDC Plc (-9.09%) experiencing the largest declines.
- Finance sector showed strength, dominating top performers, while commercial services and consumer non-durables struggled.
- Nigeria’s inflation rate dropped significantly to 24.48% in January 2025, down from 34.80% in December 2024.
- The exchange rate stood at ₦1,512/USD as of February 17, 2025.
- The CBN reaffirmed stability in the banking sector, ensuring confidence in Keystone Bank after court-ordered forfeiture.
- The Nigerian bond market reflected mixed signals with the 2-year yield at 25.80%, indicating investor preference for short-term securities.
The Nigerian Stock Exchange (NGX) experienced a moderate pullback on February 18, 2025, as the All-Share Index (ASI) declined by 0.25% to close at 107,670.98. Despite the minor loss, market sentiment remains strong, with year-to-date gains of 4.59%.
Top Gainers and Market Trends
The finance sector led the market, with Consolidated Hallmark Holdings Plc (CONHALLPLC) surging by 9.76% to ₦3.71. SUNU Assurances Nigeria Plc (SUNUASSUR) followed closely, rising 9.58% to ₦6.52, reflecting growing investor confidence in insurance stocks. The health technology sector also performed well, with Neimeth International Pharmaceuticals Plc (NEIMETH) gaining 8.77% to ₦3.35.
Other strong performers include Cornerstone Insurance Plc (CORNERST), up 7.03%, and Wapic Insurance Plc (WAPIC), gaining 5.88%.
The financial sector’s dominance in the top gainers list suggests an increasing appetite for insurance and banking stocks, potentially fueled by interest rate adjustments and increased credit availability. Credit to other sectors stood at ₦74.88 trillion as of January 2025, signaling robust liquidity in the economy.
Worst Performers: Profit-Taking in Consumer and Services Sectors
The consumer non-durables sector saw some of the largest declines, with Union Dicon Salt Plc (UNIONDICON) dropping 9.82% to ₦7.35, and Cadbury Nigeria Plc (CADBURY) losing 9.06% to ₦29.10. The commercial services sector also struggled, as The Initiates Plc (TIP) fell 9.89% to ₦4.01.
Sector Performance: Strength in Health, Weakness in Services
The best-performing sectors included health technology, producer manufacturing, and distribution services, reflecting strong demand for pharmaceuticals and essential goods.
Conversely, commercial services, technology services, and energy minerals recorded weak performances, with investors possibly rotating out of these sectors amid fluctuating global crude oil prices. Nigeria’s reference crude oil price stood at $74.72 per barrel in December 2024, showing relative stability.
Macroeconomic Indicators: Inflation and Interest Rate Outlook
The Central Bank of Nigeria (CBN) reported a significant drop in the inflation rate to 24.48% in January 2025, down from 34.80% in December 2024. This signals easing price pressures, likely attributed to monetary tightening and improved supply chain dynamics.
The Monetary Policy Rate (MPR) remains high at 27.50%, reflecting the CBN’s continued effort to curb inflation. Treasury bill rates stood at 18% for the 91-day tenor, maintaining attractive yields for fixed-income investors.
Foreign Exchange and Bond Market Movement
The Nigerian exchange rate closed at ₦1,512/USD on February 17, 2025, showing minor fluctuations but remaining relatively stable over the past week.
In the bond market, short-term instruments saw slight gains. The Nigeria 2-year bond yield settled at 25.80%, while the 3-year yield stood at 21.22%, indicating investor preference for short-duration bonds amid prevailing economic conditions.
CBN Assures Banking Stability Amid Keystone Bank Concerns
Following a recent court ruling regarding Keystone Bank’s share forfeiture, the CBN reassured depositors and investors of the bank’s stability. The central bank emphasized that the ruling was a reaffirmation of its prior intervention to safeguard depositors’ funds.
Market Outlook and Investment Implications
- Stocks to Watch: Financial stocks, particularly in insurance and banking, may continue their upward trend given strong liquidity and improving investor confidence.
- Fixed Income: High treasury yields (91-day bill at 18%) remain attractive for conservative investors seeking stable returns.
- Macroeconomic Risks: Inflation easing is a positive sign, but sustained monetary tightening and external risks (e.g., crude oil price volatility) could impact market sentiment.
- Banking Sector: The CBN’s assurance on Keystone Bank underscores regulatory commitment to financial stability.
Conclusion
The Nigerian stock market faced minor losses on February 18, 2025, but sectoral trends point to continued growth opportunities in finance, health, and distribution services. Inflation decline, stable foreign exchange, and firm monetary policies suggest a balanced investment climate with promising opportunities in select equities and fixed-income instruments.
