Analysts project sustained bull run for equities on NGX

Strong earnings and broad sectoral gains underpin positive outlook despite profit-taking risks

EXPECTATIONS of continued investor interest in fundamentally strong stocks and improving market breadth are shaping a positive near-term outlook for Nigerian equities, following another robust week of gains on the Nigerian Exchange (NGX).

Market analysts project that the equities market will maintain a bullish bias in the coming sessions, supported by sustained demand for bellwether stocks, clearer earnings visibility, and elevated trading activity. While bouts of profit-taking are anticipated as investors lock in gains, sentiment is expected to remain constructive, particularly in sectors benefiting from corporate earnings releases and valuation-driven accumulation.

“Looking ahead, we expect trading activity to remain somewhat choppy, driven by continued positioning in market bellwethers alongside bouts of profit-taking as recent gains are digested,” Cordros analysts said in their weekly market report.

These expectations follow a 3.84 percent week-on-week gain in the NGX All-Share Index (ASI), which closed at 171,727.49 points, extending its winning streak and lifting year-to-date returns to about 10.9 percent. Market capitalisation rose by the same margin to N110.23 trillion from N106.15 trillion, translating into an increase of roughly N4.08 trillion in investors’ wealth.

Investor participation remained broad-based, with market breadth firmly positive at over 2x. A total of 71 equities appreciated during the week, compared with 35 decliners, while 42 stocks closed unchanged—a significant improvement over the prior week that underscores the depth of buying interest across the market.

Trading activity strengthened markedly, reinforcing the optimistic outlook. Investors exchanged 3.86 billion shares valued at about N128.6 billion across 240,463 deals, up from 3.09 billion shares worth N81.5 billion a week earlier. The Financial Services sector led activity by volume, accounting for nearly 57 percent of total shares traded, followed by the Services and ICT sectors. Transactions in Chams Holding Company Plc, Access Holdings Plc, and Universal Insurance Plc dominated turnover by volume.

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Sectoral indices largely closed higher, reflecting prevailing risk-on sentiment. The NGX Oil & Gas Index posted the strongest performance, rising 10.88 percent on price gains in stocks such as Seplat Energy and Aradel. The Industrial Goods Index gained 4.36 percent, buoyed by renewed bargain-hunting in construction and manufacturing names, while the Banking Index added 3.57 percent amid sustained interest in fundamentally resilient lenders, including Stanbic IBTC and FirstHoldCo. Consumer Goods stocks also advanced on selective accumulation. The Insurance Index, however, declined 2.33 percent, as profit-taking persisted in some counters.

At the stock level, RT Briscoe led the gainers with a 60.7 percent surge, followed by Zichis, Abbey Mortgage Bank, Union Dicon Salt, and Austin Laz. Conversely, Deap Capital, UPDC REIT, and Red Star Express were among the worst performers, reflecting sustained selling pressure.

Looking ahead, analysts believe elevated trading volumes, improving breadth, and sectoral strength—particularly in oil & gas, banking, and industrial goods—will continue to support the market’s upward trajectory, even as investors remain selective and sensitive to valuation and earnings signals.

“In the near term, we expect the Nigerian equities market to maintain a positive bias, supported by sustained investor interest in fundamentally strong stocks and improving market breadth. Elevated trading activity and broad-based sectoral gains suggest that sentiment remains constructive, particularly in sectors benefiting from earnings releases and valuation-driven accumulation,” Cowry Asset analysts said.