Unprecedented windfall as stock investors gain N25.7trn in 7 months

•Domestic investors eclipse foreign counterparts

•Experts call for caution as price correction looms

By Peter Egwuatu

The Nigerian stock market has recorded an unprecedented growth in seven months of 2025, as investors reaped over N25.7 trillion gains Year-to-Date (YtD).

The record breaking windfall came along with monetary policy and broader macroeconomic shifts which spurred increased domestic and foreign investor confidence.

Meanwhile, market experts are already expressing caution that price correction is around the corner.

The key performance indicator, market capitalisation, which represents the value of stocks listed on the Exchange climbed to N88.4 trillion last weekend up from N62.663 trillion at the close of trading in December 2024.

Breakdown of the monthly performance shows July led with 16.5% return, contributing nearly 50% of the YtD return.  

The entire market has risen by  35.9% YtD, as the Nigerian Exchange Limited, NGX All Share Index, ASI, a major performance indicator, closed the month of July 2025 at 139,863.53 points from 102,926.40 points at the end of December 2024.

Further breakdown shows that investor activity gathered strong momentum as well, with 22 billion shares traded during the month of July up sharply from 13.8 billion in June.

So far in 2025, the market has closed in positive territory in five of the seven months.  

Analysts and investment experts have attributed the tremendous growth to the relative stability in the foreign exchange market and the entire monetary policy environment as well as liberalization of key sectors of the economy.

However, market intelligence is indicating mixed feelings over sustainability, with some cautioning investors to be risk conscious from now, while others believe the rally would continue to the end of 2025.

Sectoral performance  

The  NGX Industrial Goods sector led the chart, as its Index grew by 71.9% YtD , followed by the NGX Banking sector with index growth rate of 49.3%. The Insurance sector went up 23.53%.

However, the Oil and Gas sector declined by -10.16% YtD.

Other performance indicators recorded positive growth, NGX Lotus, posting 67.14% growth YtD; NGX Meristem Index recording 58.83%; NGX Africa Bank Value Index 54.58%; NGX Pension Index 52.94%; NGX Premium Index 51.92%; NGX 30 Index 36.83% and NGX Mainboard Index 33.08.

Gainers  

Meanwhile, the top gainers for July in the Industry Goods   sector include Tripple Gee, soaring 88.44%, followed by Lafarge (70.87%), Meyer (64.18%), and BUA Cement (41.51%).

Other notable gainers included Chemical & Allied Products (31.50%), Cutix (18.90%), Austin Laz (13.59%), and Berger Paints (14.50%).

Heavyweights like Dangote Cement, BUA Cement, and Lafarge Africa (WAPCO) were key drivers of the index’s rally, accounting for a significant portion of the movement.

NGX Banking sector  

The Banking sector also posted a strong performance, with the NGX Banking Index in July advancing 25.78% to close at 1,610.5 points from 1,280.4 points.

This growth was backed by robust investor interest, as the sector recorded a trading volume of 6.48 billion shares, the highest across all sectors.

Wema Bank led the pack with a 47.16% gain, followed by UBA (40.21%), Zenith Bank (34.33%), Access Holdings (26.24%), GTCO (23.69%), FirstHoldco (24.04%), Ecobank (21.20%), and Stanbic IBTC (18.82%).

FCMB (8.11%) and Fidelity Bank (5.25%) also posted modest advances.

NGX Insurance  

The Insurance sector maintained its upward trajectory, with the NGX Insurance Index rising 17.74%, closing the month at 889.5 points from 755.5.

Trading activity was also strong, with 3.27 billion shares changing hands.

Sovereign Trust Insurance topped the sector’s chart with a 41.04% gain, followed closely by NEM Insurance (34.08%), AIICO (33.54%), and Mansard (26.49%).

Other gainers included Universal Insurance (25.81%), Veritas Kapital (25.74%), Regency Alliance (25.00%), Linkage Assurance (12.99%), Cornerstone Insurance (7.48%), Prestige Assurance (5.45%), and Consolidated Hallmark (5.37%).

NGX Consumer Goods sector    

The Consumer Goods sector followed with a solid 11.14% gain, as the NGX Consumer Goods Index rose from 2,635.9 to 2,929.4 points. The sector recorded a trading volume of 1.1 billion shares.

Cadbury Nigeria emerged as the top gainer with a 63.86% return, followed by McNichols (60.87%), Dangote Sugar (53.61%), NASCON (40.77%), and Unilever (40.23%).

Other key performers included Champion Breweries (39.00%), Guinness Nigeria (33.01%), Nigerian Breweries (30.59%), Nestlé Nigeria (30.34%), Honeywell Flour (13.95%), and PZ Cussons (13.16%).

Oil and Gas sector lags behind  

The Oil and Gas sector was the weakest performer in July, recording a modest 1.72% gain.

Oando led the sector with a 16.32% increase, while Aradel Holdings posted a slight gain of 3.01%.  

Analysts’ insight

Commenting on the market situation, analysts at Cordros Capital, a Lagos based investment house, said: “With most H1’25 results in and broadly ahead of expectations, we expect the market rally to persist as investors reposition and re-price for earnings upside. We also anticipate sustained rotation into equities amid subdued yields in the fixed income market.”

Also commenting, analyst/ Executive Vice Chairman at High Cap Securities Limited, David Adonri, has a contrary view with regards to rally sustainability and he stated: “The momentous rally, now popularly called “TINUBU BOOM” has continued with undiminished intensity, hitting an unimaginable level in July. It’s like the NGX ASI has hit the level that the market attained in the full year 2024 just within seven months.

“The market has been boosted by surging domestic and foreign investors’ confidence arising from remarkably improving macroeconomic fundamentals, especially exchange rate stability. “Several listed enterprises that were wounded when the naira was floated are now recovering from their injuries at fast pace.

“The rally which started in 2023 driven by the sentiment of market reform policies has been concreted by remarkable improvement in corporate performance.

“The migration of financial assets from debt due to falling interest rates in July may have increased liquidity in the equities market during the month also”

He added, “The factors propelling the market now make the possibility of a crash remote except if there is a shock of monumental magnitude”.

On the direction of the market in Q3’25, Adonri said: “Predicting the direction of movement in equities is very difficult because of the numerous uncertainties that pervades the market. However, it is probably safe to guess that after the exuberant market reactions in July, a moderate correction can occur in Q3 2025 to expunge some mispricing. “However, the market now has an inbuilt mechanism that makes it resilient.

“A painful reality of the equities market is its natural volatility. If macroeconomic conditions are inspiring and corporate fundamentals are strong, equities will remain profitable and liquid. No market sustains a rally indefinitely even in the best of time. Investors need to preserve their gains through sound risk management”.

While commenting on investors’ confidence, Adonri noted: “The dominance of domestic investors in our equities market is an important reason for its resilience. As a result, the market is driven more with patient capital rather than foreign investors’ hot money that destabilizes the market when being withdrawn. Foreign Direct Investment, FDI is actually more relevant to the economy than Foreign Portfolio Investment, FPI”.

Commenting on the market development as well, Tajudeen Olayinka, Investment Banker & Stockbroker said: “Macroeconomic stability was becoming a new signal to both fixed income and equity markets, and so, investors suddenly discovered that prices were low and therefore, began to re-price equity with huge demand for public companies’ shares.

“It was evidently clear that many companies that suffered huge foreign exchange losses in the past were beginning to recover because of improved liquidity and stability in the foreign exchange market.

“This and some improvement in other macroeconomic factors are responsible for bullish sentiments in the equity market.

“Mind you, this is not to say the economy has fully recovered, but the truth is that some of the obvious challenges are being dealt with by the government. More and greater efforts are still required to get Nigeria to the promised land”.

Speaking on the possible   crash of the market, he said: “I don’t think crash is the right word to use, but I can tell you that price corrections may set in once market fundamentals can no longer be explained or defined”.

He further said: “I expect some public companies to approach the market to raise new money by issuing new shares at lower cost of capital, while some others could issue bonus shares or do listings by introduction. Combination of these steps could improve the supply side of the market and cool off rapid price movements”.

In his advice to the government, he said: “The government should move away from anti-market policies, like the 30% capital gains tax that can discourage flow of investment.  

“Foreign portfolio investment is usually unstable in any market, as any shock to the macroeconomic environment could trigger a reversal. But the fact that more domestic investors are also playing the market means that price corrections could be less volatile in the event of reversal of foreign portfolio inflows”.

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