Market News

 By : Helen Oji

Investors on the Nigerian Exchange (NGX) have recorded a substantial gain of approximately N3.6 trillion in the first four months of 2025, reflecting a strong and sustained bullish trend in the equities market.

This remarkable growth is being driven by a mix of economic reforms, robust corporate earnings, enhanced investor engagement and renewed confidence in the capital market fostered by progressive government policies.

At the beginning of the year, the market capitalisation stood at N62.918 trillion on January 1, 2025. As of April 30, it had appreciated by N3.6 trillion to close at N66.496 trillion, yesterday representing a 5.4 per cent increase.

Similarly, the all-share index, a key benchmark for market performance, also recorded significant growth during the same period, adding 2,751 points from 103,180.14 to 105,800.85 points.

Operators said a major catalyst for the market’s performance has been the series of economic reforms introduced by the Federal Government, particularly the removal of the fuel subsidy, the unification of foreign exchange windows, and the transition to a floating naira regime.

Though initially met with resistance and uncertainty, these reforms have begun to yield positive outcomes, especially in improving policy clarity and attracting foreign portfolio investors who had been previously discouraged by Nigeria’s complex and inconsistent FX landscape. The increased transparency in foreign exchange management has helped reduce volatility and encouraged the return of offshore capital into the domestic market.

Another critical factor underpinning this rally is the strong earnings posted by many listed companies. The banking and industrial goods sectors have delivered solid financial results, reinforced investor confidence and attracted income-focused investors with their generous dividend declarations.

Despite operating in a volatile macroeconomic environment marked by currency fluctuations and inflationary pressures, several companies demonstrated remarkable resilience, returning to profitability and exceeding market expectations.

Notably, the five top-tier banks – FBN Holdings, United Bank for Africa (UBA), GTCO, Access Holdings and Zenith Bank – collectively reported a pre-tax profit of N5.1 trillion last year, marking a 59 percent increase from N3.2 trillion recorded the previous year.

Cadbury Nigeria Plc also staged a significant turnaround with a profit after tax of N5.9 billion in the first quarter of 2025, a reversal from a N10 billion loss in Q1 2024, representing a 182 per cent improvement.

Dividend payouts have equally impressed shareholders. A review of dividend pay-out so far showed that Dangote Cement, which posted N503.2 billion profit in 2024, an increase of 10 per cent from N455.6 billion in 2023, declared N30 per share, which culminated into a total payout of N506.21 billion.

The cement-producing giant rewarded its shareholders with a dividend of N30 per share to shareholders for the second consecutive year, amid a harsh operating environment.

Similarly, BUA Cement declared N69.42 billion as dividends in 2024, representing a 2.5 per cent rise over N67.73 billion paid in 2023, while Geregu Power proposed N21.25 billion as a dividend to shareholders, up by 6.25 per cent from N20 billion in 2023.

Transcorp Hotel Plc dividend payout moved from N2.05 billion in 2023 to N7.6 billion in 2024, while Transcorp Power proposed a dividend of N37.5 billion in 2024, up by 59.8 per cent from N23.46 billion in 2023.

These robust performances are not only a reflection of profitability but also an outcome of improved operational efficiencies including cost optimisation, digital expansion, and effective currency hedging strategies. They have collectively bolstered investor confidence in the long-term viability of Nigerian companies.

The positive momentum is evident in the broader market indicators. By the end of February 2025, the ASI had advanced to 107,821.39 points from 102,926.4 points at the close of 2024, indicating a 4.76 per cent year-to-date increase.

The banking sector played a pivotal role in this growth, with the NGX Banking index rising by 7.5 per cent to close at 1,165.71 points. In January alone, market capitalisation grew by N1.95 trillion, expanding from N62.763 trillion to N64.709 trillion.

Investor activity has also intensified, particularly in the financial services sector, which accounted for more than 66 per cent of total trading volumes during the review period.

Stocks such as Royal Exchange Plc, Chams Holding Company Plc, and Universal Insurance Plc emerged as the most actively traded, jointly accounting for over 23 per cent of total turnover volume, a testament to the depth and breadth of market participation.

The listings of Transcorp Power Plc and Aradel Holdings have further expanded the range of investment options on the NGX. These high-profile additions not only enhanced the exchange’s total market capitalisation but also signified a growing willingness by Nigerian corporates to leverage the capital market for fundraising and visibility, reinforcing the market’s role as a vital engine of economic growth.

Additionally, measures by the Central Bank of Nigeria (CBN) to boost FX liquidity and promote a more flexible exchange rate regime have made the equities market more appealing to foreign investors. This has contributed to a modest yet steady return of foreign portfolio inflows, adding to the market’s depth and vibrancy.

Chief Executive Officer of Arthur Steven Asset Management Limited, Olatunde Amolegbe, highlighted the ongoing bank recapitalisation drive, and the anticipated listings of national giants such as the Nigerian National Petroleum Company Limited (NNPC) and Dangote Refinery as key developments that could further deepen and diversify the market.