NGX adds N1.9trn as equities rally, YTD return hits 59.7%

The Nigerian equities market opened the week with a sharp rally, adding about N1.90 trillion to investors’ wealth as the NGX All-Share Index rose 1.20 per cent to 248,529.75 points, lifting market capitalisation to N160.42 trillion.

The gain pushed the market’s year-to-date return to 59.71 per cent, from 57.81 per cent at the end of the previous week, reinforcing the strong momentum that has made Nigerian equities one of the better-performing emerging markets this year.

The latest rally means investors have continued to benefit from substantial capital appreciation despite mixed trading signals, with the market’s valuation now firmly above the N160 trillion mark.

The positive performance was driven principally by AIRTELAFRI, which gained 8.59 per cent, while UBA rose 3.01 per cent and ZENITHBANK advanced 0.71 per cent. These gains more than offset declines in several stocks, including ETI, which fell 9.92 per cent, CORNERST, down 7.96 per cent, and AIICO, which declined 2.38 per cent.

However, the strength of the headline index masked a relatively weak breadth of trading. Market breadth closed at 0.62x, with 37 stocks recording losses against 23 gainers, indicating that the market’s advance was concentrated in a relatively small number of large or influential counters.

ETI led the losers with a 9.92 per cent decline, while CHAMS topped the gainers after rising 9.80 per cent.

Trading activity was mixed, suggesting that the market’s strong valuation gain was not accompanied by broad-based increases in participation. Total volume fell 25.11 per cent to 1.14 billion units, while transaction value increased marginally by 1.37 per cent to N7.02 billion.

CONHALLPLC dominated volume trading with 354.07 million units, while FIRSTHOLDCO accounted for the largest value of transactions, with shares worth N5.12 billion changing hands.

The divergence between market value and breadth is significant because it indicates that the latest advance was driven largely by selected heavyweight stocks rather than a broad-based market-wide rally.

The market’s performance also came against a mixed macroeconomic backdrop. The Nigerian Foreign Exchange Market appreciated by 0.35 per cent to N1,360.14/$, providing further support for naira-denominated assets and potentially strengthening investor confidence in domestic securities.

Crude oil prices, however, moved higher after renewed uncertainty over the reopening of the Strait of Hormuz. Brent crude rose 3.01 per cent to $86.23 per barrel, while West Texas Intermediate gained 2.99 per cent to $80.29. Bonny Light also increased 1.29 per cent to $90.21 per barrel.

The rebound in crude prices followed comments from Iran that the United States would need to meet several conditions, including sanctions relief, an end to military threats and compensation, before the Strait of Hormuz could reopen. The development restored part of the geopolitical risk premium that had been stripped from oil prices during the previous week.

The latest equity rally therefore comes as investors balance strong domestic market momentum against global geopolitical risks, currency movements and changing expectations for commodity prices.

Meanwhile, the NASD OTC market also opened the week higher, with its Security Index rising 0.44 per cent to 4,678.08 points and market capitalisation increasing by the same margin to N2.81 trillion. Its year-to-date return improved to 32.01 per cent.

Trading on the OTC market was considerably weaker, however, with volume falling 81.48 per cent to 535,756 units and transaction value plunging 93.94 per cent to N6.00 million across 36 trades.

The divergence between the strong NGX rally and subdued trading breadth will be closely watched in subsequent sessions, particularly as investors assess whether the market can sustain its near-60 per cent annual return.

For now, the latest session reinforces the scale of Nigeria’s equity-market recovery, with market capitalisation now at N160.42 trillion and the benchmark index continuing to set new highs.