Nigerian stocks surge to unprecedented N165trn market valuation

The Nigerian equities market has reached an unprecedented milestone, driven by persistent demand for heavyweight industrial and financial equities, as total market capitalisation crossed the N165 trillion frontier to N165.114 trillion.

The benchmark NGX All-Share Index (ASI) surged past the 254,000 mark to 254,299.49 points on Friday October 30, driven by widespread buying interest across core sectors.

The current rally extends a robust multi-week bull run, bringing the year-to-date (YtD) gain for the local bourse to 63.41 percent.

The market’s surge to the historic high was anchored by significant gains among blue-chip counters and large-cap market leaders.

The Nigerian stock market’s performance reflects a combination of renewed institutional demand, strategic positioning in fundamentally sound equities, and bargain-hunting ahead of earnings reports.

For instance, Dangote Cement Plc, the industrial giant led the charge, soaring the most.

The stock’s sharp upward shift pushed the NGX Industrial Index significantly higher, acting as the primary catalyst behind the market’s record surge.

While occasional profit-taking was recorded across secondary sectors, the underlying liquidity in large-cap stocks successfully absorbed selling pressure, keeping market valuation anchored firmly at record highs.

Stockbrokers expect the positive momentum to persist in the near term as institutional investors adjust exposure in response to dynamic macroeconomic factors.

Temi Popoola, GMD/CEO, Nigerian Exchange Group (NGX Group) said, “The performance of Nigeria’s equities market is an encouraging reflection of the growing confidence in the country’s economic potential and the opportunities available to investors.

“More importantly, it highlights the increasing role of the capital market in mobilising long-term capital to support enterprise growth, investment and sustainable economic development. For Nigeria to fully realise this potential, we must continue to build a deeper, more competitive and globally connected capital market, supported by consistent economic reforms, sound policies and strong institutional collaboration,” he added.

According to Jude Chiemeka, CEO, Nigerian Exchange Limited “The NGX All-Share Index reaching a historic high, with equity market capitalisation at N165 trillion, underscores the growing depth and resilience of Nigeria’s equities market. It also reflects increased investor participation and expanding opportunities across listed companies.

“Our priority is to sustain this momentum through quality listings, product innovation, improved liquidity and greater market efficiency, further strengthening NGX as a preferred destination for capital raising and investment,” he said.

Also, sustained demand across top-tier banking institutions provided substantial momentum. Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Access Holdings, Fidelity Bank, and Wema Bank recorded strong inflows from institutional investors rebalancing their portfolios.

Additional buy-side pressure was sustained by consumer goods and mid-cap stocks, including Honeywell Flour Mills, which jumped nearly 10 percent during the Friday’s trading.

The equities market rally was led by Dangote Cement, which gained 27.81 percent in the review week to N1,420, followed by Honeywell Flour Mills, up 25.98 percent to N22.55, and UPDC REIT, which rose 20.57 percent to N21.10. Caverton Offshore Support Group was the biggest loser, shedding 25 percent to N3.60.

Analysts attributed the rally largely to increased liquidity, improved sentiment and a shift from fixed-income securities.

Omoniyi Animashaun, senior analyst at United Capital, said the decline in fixed-income yields following monetary policy easing had made equities more attractive to investors seeking higher returns.
He said increased liquidity and improved investor confidence were also supporting the rally. However, he added that improving foreign exchange stability, easing inflation and lower borrowing costs could further strengthen companies’ performance and support the market.

Kehinde Jones of Anchoria Capital Group said the outlook remained “cautiously positive,” supported by corporate earnings and stronger domestic participation.

However, Jude Aido of Sky Capital said the shift into equities was “largely liquidity-driven and temporary,” warning that investors could return to fixed-income assets if yields become more attractive.