The Nigerian Stock Exchange (NGX) continued its bullish start to the year, adding N792 billion to its market capitalisation on Thursday, January 9, 2025. This surge saw the market cap reach N64.351 trillion, up from the previous day’s N63.559 trillion, reflecting a 0.125% increase.
The All-Share Index (ASI), a key indicator of the stock market’s performance, also saw a notable rise, gaining 1,300 points to close at 105,530.74. This performance marks a positive shift from the previous day’s closing figure of 104,230.73, contributing to the Year-To-Date (YTD) return, which now stands at 2.53%.
Investors across the board were buoyed by strong performances from several prominent companies, with telecom giant MTN Nigeria, Zenith Bank, and United Bank for Africa (UBA) leading the charge. Other major equities, including Oando Plc, also contributed to the positive trend, further boosting the market’s performance.
“Today’s market performance is indicative of investor confidence as we head into the new year,” said Chijioke Nwosu, a financial analyst based in Lagos. “The market’s stability is a good sign for both local and foreign investors, signaling a possible strong economic recovery in the coming months.”
The market’s optimism was reflected in the market breadth, with 34 stocks closing higher, compared to 25 stocks that saw losses. The performance was largely driven by notable gains in MTN Nigeria, which rose by N22 to close at N242, and Honeywell Flour, which gained 82 kobo, closing at N9.11. Universal Insurance also saw a modest increase of 7 kobo, closing at 78 kobo per share.
Sector Gains and Key Performers
MTN Nigeria stood out with the highest individual gain, reflecting investor optimism in the telecom sector. The company’s performance is largely seen as a reflection of its strong position in the Nigerian market, which remains resilient despite global economic challenges.
Zenith Bank and UBA, two of Nigeria’s leading banks, also played crucial roles in the market’s upward trajectory. Both stocks posted notable gains, with Zenith Bank’s price appreciating by a significant margin. “The banking sector remains a key driver for Nigeria’s financial markets, and the stability in these major banks is reassuring for investors,” said a senior economist at FSDH Merchant Bank.
In addition, stocks like Oando Plc, Ikeja Hotel, and Transcorp Hotel recorded gains, further supporting the bullish sentiment in the market.
Transcorp Hotel, for instance, gained N11.35, closing at N127.35, while Ikeja Hotel’s shares increased by N1.15 to close at N13.50 per share. These gains in the hospitality sector reflect broader optimism in Nigeria’s business environment as the economy shows signs of gradual recovery.
Stocks on the Decline: RT Briscoe and Others Lead
Despite the positive market performance, there were some stocks that faced a downturn. RT Briscoe, a major player in the automotive sector, led the list of losers, shedding 26 kobo to close at N2.34. Other companies, including Sunu Assurances, Initiate Plc, and UPDC Real Estate Investment Trust, also recorded losses, but the broader market remained firmly in the green.
Sunu Assurances, for example, saw a decline of 90 kobo, closing at N8.11, while Initiate Plc lost 27 kobo to close at N2.52. The performance of these stocks highlights the volatility that still exists in the market, though the overall trend remained positive.
Trading Volume and Value: A Mixed Picture
Although the market experienced notable gains, trading volume and value showed some signs of slowing down. A total of 481.69 million shares, valued at N12.82 billion, changed hands across 12,824 deals on Thursday. This represents a decrease in trading activity from the previous session, where 756.42 million shares worth N24.69 billion were exchanged in 13,551 deals.
Despite this drop in transaction volume, Universal Insurance dominated the activity chart, leading with 97.24 million shares traded. Seplat, a major player in the energy sector, recorded the highest value of trades, worth N4.56 billion.
Investor Sentiment and Market Outlook
The mixed results in trading volume and value, while showing a decline in turnover, have not dampened investor sentiment. Financial analysts suggest that the overall upward trend in market capitalisation and the performance of key sectors will likely continue in the near term.
“The positive returns in the first week of January provide a strong foundation for further growth, especially with the banking and telecom sectors performing well,” said Nwosu. “However, investors will need to remain vigilant of any external shocks that could impact global markets, including fluctuations in oil prices and international interest rates.”
Experts also emphasized that while the performance of MTN Nigeria and the banking giants has helped stabilize the market, it remains crucial for the broader market to see contributions from other sectors, such as manufacturing, energy, and agriculture, to ensure sustainable growth.
The Nigerian stock market’s performance is seen as a reflection of broader economic trends. With Nigeria’s economy showing signs of recovery, bolstered by rising oil prices and improving fiscal policies, the stock market has become an attractive option for investors seeking to tap into the country’s growth potential.
