Brokers recommend “hold” on banking stocks as market sentiment improves

MARKET analysts have issued a wave of “Hold” recommendations on banking stocks as investor sentiment improves despite recent market volatility.

This reflected a cautious optimism following mixed market performance and sectoral rotation in the Nigerian Exchange (NGX).

Last week, the market responded to a reversal in the disinflation trend seen in the March Consumer Price Index (CPI), triggering profit-taking activities that pulled the All-Share Index (ASI) down by 0.32 per cent, closing at 104,233.81 points. Market capitalisation stood at N65.50 trillion as of April 17, while year-to-date returns settled at 1.27 per cent.

Sector performance painted a mixed picture. The NGX Consumer Goods Index rose by 2.33 per cent, and the Oil and Gas Index edged up by 0.20 per cent. However, the Banking Index slipped by 5.43 per cent, while Insurance dipped 2.34 per cent.

The Industrial Goods Index remained flat. Market sentiment, however, improved significantly, with sentiment ratio rising to 3.8x from 2.7x.

Within the banking sector, brokers adjusted their outlooks. Lagos-based stock brokerage firm, Capital Bancorp revised its ratings for ACCESSCORP and ETI from “Caution” to “Hold,” signaling greater confidence. FutureView also revised its stance on UBA, shifting from “Hold” to “ETI.”

Proshare analysts suggest that these adjustments reflect stabilising investor outlooks in the face of economic uncertainty.

According to them, across other sectors, sentiments remained mixed. In consumer goods, Capital Bancorp held steady on its ratings, while FutureView downgraded Nigerian Breweries (NB) to “Sell” and upgraded Nestlé Nigeria from “Sell” to “Hold,” reflecting cautious optimism.

In the ICT sector, MTNN saw divergent recommendations: FutureView downgraded its view to “Hold/Sell,” citing emerging concerns, while Capital Bancorp reaffirmed a “Buy,” suggesting confidence in its long-term fundamentals.

For the industrial sector, both brokers maintained a “Buy/Hold” outlook across major stocks, reflecting stable investor expectations.

Despite recent pressure, the NGX began this week (Tuesday) on a bullish note following the Easter break. Renewed interest in key banking stocks such as UBA (+2.80 per cent), ACCESSCORP (+2.49 per cent), ZENITHBANK (+2.27 per cent), and GTCO (+1.69 per cent) lifted the ASI by 49 basis points to 104,739.61 points. Market capitalisation surged by N317.84 billion to N65.82 trillion, with year-to-date returns now at 1.76 per cent.

Market breadth also showed improvement, closing at 0.28x with 38 gainers and 20 losers. INTBREW led the gainers’ chart, surpassing its 52-week high to close at N6.05, while INTENEGINS led the laggards. NB and ABBEYBDS also hit new 52-week highs.

Trading activity declined slightly, with total volume down 6.11 per cent to 353.28 million shares valued at N7.20 billion across 13,734 deals. ACCESSCORP led in volume with 38.61 million units, while ZENITHBANK topped in value at N1.07 billion.

While headwinds remain, the shift in broker recommendations and investor interest suggests selective opportunities in the banking sector, as stakeholders seek a balance between growth and risk in a volatile environment.

ECOWAS, Sterling Bank to Support Small Businesses with $50 Million

One of Nigeria’s leading commercial lenders, Sterling Bank, has entered a strategic partnership with the ECOWAS Bank for Investment and Development (EBID) to channel US$50 million in long-term funding to Nigerian businesses across high-impact sectors.

The Senior Unsecured Facility further strengthens Sterling’s already robust Corporate and Investment Banking portfolio, reinforcing its commitment to powering the ambitions of businesses that are building the future.

As a financial institution recognised for delivering innovative, purpose-driven solutions at scale, Sterling has consistently backed real sector growth, supporting infrastructure, energy, agriculture, and manufacturing projects with transformative potential.

This new collaboration with EBID reflects the confidence of global and regional institutions in Sterling’s ability to deploy capital effectively and drive tangible results in the economy.

“This facility is not about doing more; it’s about doing what we’ve always done, at even greater scale and pace,” said Dele Faseemo, Group Executive, Corporate and Investment Banking at Sterling Bank. “We’re proud to be the institution of choice for development finance partners looking to make a meaningful difference. Our track record speaks for itself, and this partnership with EBID will allow us to deepen our impact where it matters most.”

Sterling’s strategic focus on the HEART sectors: Health, Education, Agriculture, Renewable Energy, and Transportation, has already made it a trusted partner to thousands of businesses driving sustainable growth.

With this facility, the Bank will further enhance its ability to provide flexible, competitively priced financing to enterprises that are ready to scale, innovate, and lead in their industries.

This facility amplifies Sterling’s existing capacity to unlock new possibilities for businesses across Nigeria.

From manufacturers expanding their production lines to renewable energy developers executing climate-smart infrastructure, Sterling remains the go-to bank for enterprises creating real value in the Nigerian and West African economies.

“The choice of Sterling Bank by EBID is a recognition of our leadership and execution strength,” Faseemo added. “It reflects our consistent delivery, strong governance, and deep understanding of the markets we serve. We look forward to putting this capital to work for the benefit of our clients, communities, and the economy.”

Sterling continues to attract partnerships with leading development finance institutions globally, further proof of the confidence in its long-term strategy, operational integrity, and ability to catalyze inclusive economic transformation.

READ ALSO: Top 10 performing stockbrokers valued at N1.472trn in Q1 2025