The rising confidence in the economy, coupled with strong 2025 Q1 corporate and easing inflation, continued to spur strong positive sentiments in the equities sector of the Nigerian Exchange Limited (NGX) last week as investors gained N613 billion in five trading sessions.

At the close of transactions last week, the all-share index (ASI) appreciated by 0.9 per cent to close at 109,710.37 points. Also, market capitalisation rose significantly, adding N613.99 billion to close at N68.95 trillion. The increase indicated a broad-based investor interest across various sectors.
This uptick lifted the year-to-date return on investment to 6.59 per cent, reinforcing a bullish market sentiment.

Analysts noted that the positive market performance was supported by a combination of factors, including a softer inflation number and anticipation of a more accommodating monetary stance from the Central Bank of Nigeria (CBN).April 2025 inflation eased to 23.71 per cent, providing a respite for businesses and consumers.

The decline in inflation bolstered market sentiment ahead of the CBN’s upcoming Monetary Policy Committee (MPC) meeting, scheduled for May 19–20, where investors anticipate possible policy adjustments to support economic growth further. Adding to the optimism, investors are closely watching the release of Nigeria’s first-quarter 2025 GDP figures.

The rally was broad-based, with all sectoral indices recording gains, reflecting widespread investor confidence. The NGX Consumer Goods index led the pack with 4.08 per cent gain, driven by significant buying interest in Champion, NNFM, May & Baker Nigeria Plc and Honeywell Flourmills Plc.

The NGX insurance index followed, advancing by 2.47 per cent, while the NGX Banking Index rose by 1.19 per cent, reflecting the continued strength of financial stocks.

Energy stocks also performed well, with the NGX Oil and Gas Index rising by 0.66 per cent.

Meanwhile, the NGX Industrial and NGX Commodity indices posted marginal gains of 0.13 per cent and 0.14 per cent, respectively, reflecting modest but stable investor interest in these sectors.

Despite the upbeat market sentiment, trading activity was subdued as the total volume of shares traded declined by 1.66 per cent to 2.6 billion units, while the total value of trades dropped by 17.32 per cent to N63.66 billion.

Also, the number of deals fell by 10.15 per cent to 77,370, indicating a quiet trading environment despite the overall positive market momentum. However, market breadth remained strong, with 61 gainers outpacing 31 losers, resulting in a healthy breadth ratio of 1.97x. This broad market participation underscores the sustained investor appetite for Nigerian equities, particularly in underpriced and fundamentally strong counters.

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said that the Nigerian stock market is expected to witness mixed sentiments in the coming sessions as investors navigate ongoing sector rotation and anticipate the release of the April consumer price index (CPI) report.

According to Omordion, the current markup phase presents a window for investors to acquire fundamentally strong stocks trading at attractive valuations, particularly as portfolio managers engage in rebalancing to optimise returns. He noted that a few audited corporate earnings reports, potentially accompanied by dividend announcements, are also anticipated, which could further influence trading decisions.

Despite some near-term volatility, Omordion believes that the ongoing price corrections provide a strategic entry point for long-term investors seeking to build value in their portfolios.

Also, analysts at Cowry Asset Management Limited projected a continuation of the bullish momentum in the coming week.They pointed out that as investors digest the impact of a potential slowdown in inflation, the market is likely to remain buoyant, supported by expectations of a possible interest rate cut by the Central Bank of Nigeria (CBN).

The firm highlighted that a favourable macroeconomic environment, coupled with further policy support, could reinforce positive investor sentiment. They advised investors to prioritise equities with robust fundamentals, resilient earnings and attractive valuations, as these are more likely to withstand market uncertainties and deliver superior returns over the medium to long term.

Further breakdown of last week’s transactions showed that a turnover of 2.606 billion shares worth N63.785 billion was recorded in 77,593 deals by investors on the floor of the Exchange, in contrast to a total of 2.645 billion shares valued at N77.005 billion being exchanged in 86,110 deals during the preceding week.

The financial services (measured by volume) led the activity chart with 1.54 billion shares valued at N28.9 billion traded in 32,805 deals, contributing 59.08 per cent to the total equity turnover volume. The services industry followed with 286.8 million shares worth N1.7 billion in 6,280 deals.

The consumer goods industry ranked third, with a turnover of 202.565 million shares worth N7.4 billion in 9,708 deals. Trading in the top three equities, namely FCMB Group Plc, Access Holdings Plc and Tantalizer Plc (measured by volume) accounted for 600.684 million shares worth N6.6 billion in 7,201 deals, contributing 23.05 per cent to the total equity turnover volume and value, respectively.