Key Highlights:
- IKEJA HOTEL PLC led the gainers, surging 10.0% in a bullish consumer services sector.
- NORTHERN NIGERIA FLOUR MILLS PLC dropped 9.99%, leading the laggards.
- NGX All Share Index closed at 108,127.63, declining 0.34% from the previous day.
- Inflation rate eased to 24.48% in January, a positive indicator for economic stability.
- CBN maintained the Monetary Policy Rate at 27.50% to curb inflationary pressures.
- Nigerian bond market showed resilience, with the 2-year bond yielding 26.197%.
The Nigerian stock market closed mixed on February 24, 2025, as the NGX All Share Index (ASI) recorded a decline of 0.34%, settling at 108,127.63 points. This downturn was primarily driven by sell-offs in large-cap stocks, reflecting investor caution amid recent monetary policy adjustments by the Central Bank of Nigeria (CBN). The NGX 30 Index, which tracks the top 30 most liquid stocks, also fell 0.40% to 4,020.47 points. The cautious sentiment was further exacerbated by concerns over rising interest rates and global economic uncertainty. Additionally, reduced liquidity in the market led to increased volatility, particularly among banking and industrial stocks. Analysts suggest that investors are taking a wait-and-see approach ahead of upcoming corporate earnings reports and potential regulatory shifts.
Top Market Gainers and Losers
Leading the gainers’ chart was IKEJA HOTEL PLC, which surged 10.0% to close at ₦12.1 per share. The stock benefited from renewed investor confidence in the hospitality sector, driven by improved earnings and positive sector sentiment. The company’s expansion into premium hotel services and aggressive marketing strategies further bolstered investor optimism. Additionally, seasonal demand for hospitality services has played a crucial role in the stock’s upward momentum. UNION HOMES REAL ESTATE INVESTMENT TRUST (UHOMREIT) followed closely with a 9.97% gain, reflecting strong demand for finance sector stocks. The growing interest in real estate investment is attributed to increased urbanization and a favorable interest rate environment, making REITs an attractive option for investors seeking stable returns.
On the losing side, NORTHERN NIGERIA FLOUR MILLS PLC (NNFM) experienced a steep 9.99% decline, closing at ₦72.55 per share. Persistent supply chain disruptions and high input costs have weighed heavily on the company’s profitability, leading to reduced investor confidence. EUNISELL INTERLINKED PLC, a manufacturing company, also shed 9.96%, reflecting pressure in the producer manufacturing sector. Declining consumer demand and increased competition have further eroded the company’s market position, forcing investors to reassess their holdings.
Sectoral Performance
The consumer services and transportation sectors led the market, supported by increased economic activities and improved earnings outlook. The hospitality industry, in particular, witnessed a surge in demand, driving stock prices higher. Additionally, increased mobility and improved logistics efficiency contributed to gains in the transportation sector. Conversely, producer manufacturing, technology services, and energy minerals struggled due to cost pressures and regulatory challenges. Rising input costs, foreign exchange volatility, and high energy prices have continued to weigh on manufacturers. Furthermore, the technology services sector faced headwinds due to slow adoption rates of new digital solutions and regulatory hurdles.
Macroeconomic and Policy Trends
The Central Bank of Nigeria (CBN) maintained the Monetary Policy Rate (MPR) at 27.50%, citing inflationary concerns despite the slight moderation in consumer prices. The latest data shows inflation eased to 24.48% in January, down from 34.80% in December, suggesting that recent monetary tightening is yielding results. The decline in inflation is also attributed to lower food prices and improved supply chain efficiency, which have helped to stabilize cost pressures. Additionally, the government’s efforts to reduce fuel subsidies have contributed to lowering price distortions, making the inflation trend more sustainable.
Meanwhile, the Nigerian bond market showed resilience, with the 2-year bond yielding 26.197%, while the 5-year bond yield stood at 20.373%. These rates reflect investor confidence in Nigeria’s fixed-income market amid global economic uncertainties. The stable bond yields also suggest that investors are seeking safer asset classes, particularly in light of recent stock market volatility. Furthermore, continued monetary tightening by the CBN is expected to maintain bond yields at attractive levels, ensuring that fixed-income investments remain competitive for institutional investors.
Currency and Exchange Rate Movements
The Nigerian foreign exchange market saw slight volatility, with the Naira closing at ₦1,502.50 per USD on February 21, 2025. This represents a mild depreciation from the previous day’s ₦1,496.00 per USD, attributed to increased FX demand by importers. The depreciation was also influenced by speculative trading, as traders anticipated further tightening measures from the Central Bank of Nigeria. Additionally, external factors, such as fluctuations in crude oil prices and global investor sentiment, contributed to the naira’s movement. Despite the depreciation, market analysts predict that ongoing interventions by the CBN could help stabilize the currency in the coming weeks.
Outlook for the Nigerian Market
Looking ahead, the market remains poised for mixed movements, with inflation trends, monetary policy decisions, and corporate earnings guiding investor sentiment. Volatility is expected to persist in the short term as investors react to global economic shifts and domestic fiscal policies. Additionally, sector-specific developments, particularly in the financial and energy markets, may shape broader market movements. Investors are advised to stay watchful of earnings reports and monetary policy updates for informed decision-making, while also considering geopolitical factors that could impact market stability.
