In February, Nigeria’s listed equities increased by N2.5 billion, with the market rising 3.18 percent due to strong performances in industrial, consumer goods, and insurance stocks. The NGX ASI improved substantially, closing at 107,821.39 points. Despite record declines in oil & gas and banking sectors, investor confidence remained amidst an encouraging inflation report and stable monetary policy decisions. However, late February saw a decline of 0.62 percent as market volatility persisted.
In February, the value of Nigeria’s listed equities experienced an increase of approximately N2.5 billion, despite a backdrop of varied trading sessions marked by both bargain hunting and profit-taking activities. The market saw a rise of 3.18 percent due to investor interest in industrial, consumer goods, and insurance stocks, in contrast to a significant decline in the oil & gas and banking sectors.
The Nigerian Exchange Limited (NGX) reported that the All-Share Index (ASI) began the month at 104,496.12 points and had increased to 107,821.39 points by February 28, with the market capitalization rising from N64.708 trillion to N67.193 trillion. Investor activity improved significantly during this period, aided by Zenith Bank Plc’s hybrid offer related to a rights issue and a public offering, both priced at N36 and N36.50 per share respectively.
Despite volatility in the market throughout the month, the NGX ASI managed a positive closure, primarily driven by investor confidence in stocks with robust fundamentals. This momentum led to a year-to-date (YtD) return of +4.76 percent. During this timeframe, the National Bureau of Statistics (NBS) revealed a reduction in the headline inflation rate to 24.48 percent in January from 34.80 percent in December 2024, following the rebasing process.
The Monetary Policy Committee (MPC) of Nigeria, in its 299th meeting, decided to retain the Monetary Policy Rate (MPR) at 27.50 percent, while maintaining the Cash Reserve Ratio (CRR) for deposit money banks at 50 percent and the liquidity ratio at 30 percent. Analysts from Meristem Research expressed optimism that the current monetary policy stance may foster positive market sentiment towards equity assets, predicting increased buying interest as companies prepare for full-year results and dividend announcements.
However, by the end of the last trading week of February, the Nigerian equities market declined by 0.62 percent as investors sold off primarily banking, insurance, and oil & gas stocks, resulting in a week-end close in the red, with dip buyers not stepping in to counteract the trend.
In summary, Nigeria’s stock market witnessed a modest rise of N2.5 billion in February, buoyed by sectors such as industrial goods and insurance, despite significant downturns in oil and banking stocks. The NGX ASI recorded a positive trajectory while the inflation rate showed a decline, providing potential for favorable market conditions moving forward. However, recent trading activities revealed a decrease as investor focus shifted, leaving the market fluctuating amidst cautious sentiment.
Original Source: businessday.ng
