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By Chukwuma Umeorah
Investors on the Nigerian equities market gained about N26.7 trillion in April as the Nigerian Exchange (NGX) recorded its highest monthly rally on record, driven by renewed foreign portfolio inflows, improved domestic participation and stronger corporate earnings.
Data from the Exchange showed that market capitalisation rose from N129.21 trillion at the start of April to N155.99 trillion by April 30, representing a N26.78 trillion increase. Similarly, the NGX All-Share Index (ASI) advanced by 20.36 per cent to close at 242,277.81 points from 201,287.78 points at the beginning of the month.
Analysts said the rally reflects a combination of macroeconomic adjustments and market-specific reforms that have improved liquidity and investor confidence. The Chief Operating Officer of InvestData Consulting Limited, Ambrose Omordion, said the performance marks the strongest monthly gain recorded by the market. “This achievement is particularly noteworthy as the earnings from both foreign and local companies are exceeding expectations. In the context of ongoing global challenges, including the crisis in the Middle East, the Nigerian market stands out as one of the best-performing markets both globally and in Africa, yielding attractive returns for investors,” he said.
He added that policy direction and ongoing economic adjustments have played a key role in shaping investor sentiment and pricing.
According to him, “this development serves as an eye-opener, as local companies on the Nigerian Exchange are rewarding shareholders generously, supporting the rising prices and demonstrating the market’s ability to generate wealth for both seasoned and new investors.”
Market operators also linked the rally to improved naira stability, clarity around the ongoing banking recapitalisation exercise, and operational reforms such as extended trading hours, which have increased trading activity and market depth.
The Managing Director and Chief Executive Officer of ECL Asset Management Limited, Charles Fakrogha, said structural changes in the market are beginning to influence investor behaviour and liquidity.
He noted, “the significance of ongoing reforms, particularly structural reforms that have been reshaping the market landscape. For instance, the transition from a T+3 settlement cycle to a T+2, and now discussions are already underway regarding the potential implementation of a T+1 cycle. This shift indicates a move towards faster trade settlements, which may enhance liquidity and investor confidence.”
Fakrogha said corporate earnings and dividend expectations have also contributed to the sustained buying interest in equities. “In addition to changes in settlement periods, the performance of various listed companies has contributed positively to market sentiment. The returns these companies are generating and reporting to investors play a crucial role in encouraging further investment,” he said.
He added that investors are positioning ahead of dividend payouts following the release of first-quarter results, which have generally shown strong performance across sectors.
Despite the strong rally, analysts expect intermittent profit-taking as prices adjust to recent gains, noting that price volatility remains a normal feature of the equities market.
Fakrogha said, “for any market, price fluctuations are a natural occurrence and prices tend to rise and fall,” adding that the current trend remains sustainable if supported by earnings growth and policy consistency.
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Market data also indicate that trading activity strengthened during the period, reflecting increased participation from both institutional and retail investors, even as buying interest remained selective across sectors.
Cowry Asset Management in their weekly review note said the direction of the market in the near term will depend on liquidity conditions, portfolio rebalancing and broader macroeconomic developments, but maintained that equities remain attractive relative to other asset classes if current conditions persist.
“However, the recent strong rally may trigger intermittent profit-taking, particularly in stocks that have recorded significant price appreciation in recent sessions. Market direction will likely be influenced by portfolio rebalancing activities, liquidity conditions, and investor positioning ahead of macroeconomic developments. While sectoral rotation may persist, especially toward fundamentally driven counters, overall sentiment is expected to remain cautiously optimistic.
Accordingly, we anticipate a mixed trading pattern in the near term, with pockets of buying interest underpinning the market, albeit with increased volatility as investors balance profit-taking with selective bargain hunting.”
Meanwhile details from the final trading week of April show that the bullish trend accelerated, with the ASI rising by 7.33 per cent week-on-week to close at 242,277.81 points, while market capitalisation increased to N155.99 trillion, reflecting a gain of about N10.66 trillion within the week alone.
Trading activity also strengthened, as investors exchanged about 4.84 billion shares valued at N287.76 billion in over 332,000 deals, higher than the previous week’s turnover, indicating increased participation and liquidity in the market.
The financial services sector dominated activity, accounting for over 77 per cent of total traded volume and about 43 per cent of value, driven largely by transactions in tier-one banking stocks.
Sectoral performance remained broadly positive during the week, with gains recorded in oil and gas, industrial goods, commodities and consumer goods stocks, while banking and insurance indices closed lower, reflecting profit-taking in some large-cap counters.
Market breadth weakened slightly, with 47 gainers against 53 losers, suggesting that while the broader index advanced, buying interest was selective across counters.
For individual stock performances, Zichis Agro Allied Industries Plc gained 39.62 per cent to close at N21.78 per share, followed by The Initiates Plc which rose by 33.04 per cent to N30.60. UACN Plc advanced by 27.82 per cent to N181.50, while BUA Cement Plc appreciated by 24.78 per cent to close at N418.00 per share.
Similarly, CAP Plc gained 22.53 per cent to N145.20, Livestock Feeds Plc increased by 22.31 per cent to N7.95, while Aradel Holdings Plc rose by 20.48 per cent to N2,024.00 per share. Beta Glass Plc climbed by 19.96 per cent to N598.00, Industrial and Medical Gases Nigeria Plc added 19.17 per cent to N42.90, and Lafarge Africa Plc grew by 18.68 per cent to close at N350.00 per share.
On the losers’ chart, United Bank for Africa Plc declined by 22.27 per cent to N42.75 per share, while Royal Exchange Plc fell by 20.00 per cent to N1.36. Trans-Nationwide Express Plc dropped by 18.99 per cent to N6.40, and Deap Capital Management and Trust Plc shed 14.49 per cent to close at N4.19 per share.
