Banking Stocks Drive NGX Market Surge, Adding N2.5 Trillion to Market Value in February
Investor Confidence Soars as Equities Market Doubles January’s Growth Rate
The Nigerian equities market continued its bullish run in February 2025, recording a significant N2.5 trillion increase in market capitalization. This surge, fueled primarily by strong banking sector performance, reflects deepening investor confidence and marks a sharp acceleration from January’s N1.94 trillion gain.
At the close of trading on February 28, 2025, the market capitalization rose by N2.48 trillion (3.4%), reaching N67.19 trillion, up from N64.71 trillion recorded on January 31, 2025. Similarly, the NGX All-Share Index (ASI) climbed 3,325.27 points (3.1%) to 107,821.39 points, strengthening market optimism.
Banking Stocks Lead the Charge
The banking sector emerged as the market’s strongest driver, appreciating 7.5% year-to-date, with its index rising from 1,084.5 basis points at the start of the year to 1,165.71 basis points. Investors flocked to financial stocks, anticipating robust corporate earnings and attractive dividend payouts.
Conversely, the oil and gas sector faced a downturn, as the NGX Oil/Gas Index declined 5.54% year-to-date, closing at 2,561.63 basis points, down from 2,712.06. This drop was largely attributed to global crude oil price fluctuations and sector-specific challenges.
The insurance sector also experienced slight weakness, with the NGX Insurance Index dipping 0.24% to 716.28 basis points from 718 points. Meanwhile, the industrial and consumer goods sectors saw moderate movements as investors balanced their portfolios between blue-chip stocks and defensive assets.
Fixed-Income Market and Policy Shifts
The Sovereign Bonds Index appreciated by over 4%, indicating a decline in bond yields amid rising demand for government securities. This trend was driven by:
• Macroeconomic stability
• Easing inflationary pressures
• Expectations of monetary policy adjustments
Additionally, the Central Bank of Nigeria’s (CBN) decision to lower interest rates on Treasury bills made fixed-income investments less attractive, prompting investors to pivot towards equities.
Market Outlook: Bullish Sentiment Expected in March
Looking ahead, analysts predict that the market’s bullish momentum will persist into March, driven by the release of full-year corporate earnings reports. Historically, earnings season fuels heightened investor activity, especially if companies announce:
• Strong financial results
• Dividend declarations
• Positive forward guidance
However, analysts caution that potential risks such as profit-taking, global market volatility, and policy uncertainties could impact market dynamics. Investors are advised to focus on fundamentally strong stocks with attractive valuations to maximize returns.
If corporate earnings continue to impress, the Nigerian Exchange (NGX) could extend its rally into Q2 2025, reinforcing its position as one of the top-performing emerging markets of the year.
Vice President of Highcap Securities Limited, David Adonri, remarked:
“The equities market appreciated by 3.2% in February 2025, effectively doubling January’s performance. This rally was driven by the banking sector, which gained 7.49%.”
With investor confidence at an all-time high, Nigeria’s stock market remains a key player in the African financial landscape, attracting both local and foreign capital inflows.
Investor Confidence Soars as Equities Market Doubles January’s Growth Rate
The Nigerian equities market continued its bullish run in February 2025, recording a significant N2.5 trillion increase in market capitalization. This surge, fueled primarily by strong banking sector performance, reflects deepening investor confidence and marks a sharp acceleration from January’s N1.94 trillion gain.
At the close of trading on February 28, 2025, the market capitalization rose by N2.48 trillion (3.4%), reaching N67.19 trillion, up from N64.71 trillion recorded on January 31, 2025. Similarly, the NGX All-Share Index (ASI) climbed 3,325.27 points (3.1%) to 107,821.39 points, strengthening market optimism.
Banking Stocks Lead the Charge
The banking sector emerged as the market’s strongest driver, appreciating 7.5% year-to-date, with its index rising from 1,084.5 basis points at the start of the year to 1,165.71 basis points. Investors flocked to financial stocks, anticipating robust corporate earnings and attractive dividend payouts.
Conversely, the oil and gas sector faced a downturn, as the NGX Oil/Gas Index declined 5.54% year-to-date, closing at 2,561.63 basis points, down from 2,712.06. This drop was largely attributed to global crude oil price fluctuations and sector-specific challenges.
The insurance sector also experienced slight weakness, with the NGX Insurance Index dipping 0.24% to 716.28 basis points from 718 points. Meanwhile, the industrial and consumer goods sectors saw moderate movements as investors balanced their portfolios between blue-chip stocks and defensive assets.
Fixed-Income Market and Policy Shifts
The Sovereign Bonds Index appreciated by over 4%, indicating a decline in bond yields amid rising demand for government securities. This trend was driven by:
• Macroeconomic stability
• Easing inflationary pressures
• Expectations of monetary policy adjustments
Additionally, the Central Bank of Nigeria’s (CBN) decision to lower interest rates on Treasury bills made fixed-income investments less attractive, prompting investors to pivot towards equities.
Market Outlook: Bullish Sentiment Expected in March
Looking ahead, analysts predict that the market’s bullish momentum will persist into March, driven by the release of full-year corporate earnings reports. Historically, earnings season fuels heightened investor activity, especially if companies announce:
• Strong financial results
• Dividend declarations
• Positive forward guidance
However, analysts caution that potential risks such as profit-taking, global market volatility, and policy uncertainties could impact market dynamics. Investors are advised to focus on fundamentally strong stocks with attractive valuations to maximize returns.
If corporate earnings continue to impress, the Nigerian Exchange (NGX) could extend its rally into Q2 2025, reinforcing its position as one of the top-performing emerging markets of the year.
Vice President of Highcap Securities Limited, David Adonri, remarked:
“The equities market appreciated by 3.2% in February 2025, effectively doubling January’s performance. This rally was driven by the banking sector, which gained 7.49%.”
With investor confidence at an all-time high, Nigeria’s stock market remains a key player in the African financial landscape, attracting both local and foreign capital inflows.
