By Chukwuma Umeorah
The Nigerian stock market saw a significant upswing in the first quarter of 2025, gaining N3.49 trillion as investors responded to a mixed bag of corporate earnings from 2024, reported by companies listed on the Nigerian Exchange Limited (NGX). This marks a substantial increase of N18.2 trillion compared to the same period in 2024, fueled by federal government reforms.
Year to date (YTD), market capitalization has risen from N62.763 trillion at the end of 2024 to N66.257 trillion as at the close of trade for March 28, a 5.6 per cent increase. This growth has been supported by sentiment-driven trading and a robust rally in banking stocks, spurred by the Central Bank of Nigeria’s recapitalisation efforts.
According to market data, January saw a N1.95 trillion increase due to cautious investor strategies, while February added N2.48 trillion, peaking at N67.193 trillion. However, March experienced a downturn, with a N936 billion drop as investors pivoted towards money market options.
The NGX All-Share Index (ASI) also climbed, gaining 2,734.24 basis points or 2.66 per cent, ending at 105,660.64 basis points from an opening of 102,926.40 this year.
The Managing Director at Globalview Capital Limited, Aruna Kebira, attributed the first quarter’s performance to declining inflation rates down to 23.18 per cent from 24.48 per cent offering relief to investors. He noted that “less appealing money market yields, combined with steady Monetary Policy Rates (MPR) from the last MPC meeting, had redirected investor interest towards equities.”
Kebira further highlighted strong corporate releases and generous dividends, such as Zenith Bank’s N4.00, UBA’s N3.00, and GTCO’s notable N7.03 final dividends, as key drivers.
Meanwhile, trading data for the final week of March showed that a total turnover of 7.521 billion shares worth N398.949 billion were traded in 61,312 deals, an increase from the previous week’s 2.902 billion shares valued at N48.064 billion in 57,044 deals. This surge in activity marked by a 159.2 per cent increase in volume and a 730.04 per cent jump in value underscored heightened institutional participation and repositioning ahead of dividend payouts.
The Industrial Goods sector led the charge, contributing 4.923 billion shares valued at N331.999 billion in 2,969 deals, accounting for 65.46 per cent of total equity turnover volume and 83.22 per cent of value. The Financial Services industry followed with 2.092 billion shares worth N31.744 billion in 32,421 deals, while the Services Industry recorded 198.775 million shares valued at N788.669 million in 3,450 deals.
Notably, trading in Lafarge Africa Plc, Sovereign Trust Insurance Plc, and Cutix Plc dominated, with 5.546 billion shares worth N332.381 billion in 1,300 deals, contributing 73.73 per cent and 83.31 per cent to total equity turnover volume and value, respectively.
Sectoral performance was predominantly bullish, with the NGX Banking Index surging 5.61 per cent, fueled by strong buying interest in stocks like GTCO, which gained 18.2 per cent to N68.80 per share. The NGX Insurance Index rose 1.89 per cent, while the Consumer Goods and Industrial Goods indices eked out gains of 0.33 per cent and 0.01 per cent, respectively.
Cowry Research’s Weekly Financial Markets Review noted that the bullish trend was supported by corporate actions in the banking sector, attractive dividend declarations, and quarter-end window-dressing activities. Looking ahead, they forecast that the, “bullish trend is expected to persist as the market fully enters the earnings season, with dividend announcements likely to sustain investor interest in blue-chip stocks. However, portfolio rebalancing activities and profit-taking could introduce some volatility as investors assess corporate earnings results and macroeconomic data.”