In February, Nigeria’s listed stocks rose by N2.5 billion, increasing 3.18% despite mixed trading. The NGX ASI climbed to 107,821.39 points, supported by interest in industrials and consumer sectors. However, banking and oil & gas saw declines amidst volatility. Analysts expect continued growth as investors await earnings season amid stable monetary policy.
In February, the value of Nigeria’s listed stocks saw a notable increase of approximately N2.5 billion, despite experiencing mixed trading activities characterized by both bargain hunting and profit-taking. The market achieved a growth of 3.18 percent, driven by investor interests in sectors such as industrials, consumer goods, and insurance, even as oil & gas and banking stocks faced significant declines. The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and overall equities market capitalization rose from 104,496.12 points to 107,821.39 points, and from N64.708 trillion to N67.193 trillion, respectively, by the end of trading on February 28.
Moreover, increased buying activities contributed to the market’s rise, with Zenith Bank Plc listing a hybrid offer as part of its rights issue of 5,232,748,964 ordinary shares priced at N36 per share. Additionally, the bank offered a public subscription for 2,767,251,036 ordinary shares at N36.50. Despite the market experiencing considerable volatility throughout February, the NGX ASI managed to maintain an upward trajectory as investors gravitated towards stocks with solid fundamentals, resulting in a year-to-date return of +4.76 percent.
During the same month, the National Bureau of Statistics (NBS) released a report indicating Nigeria’s headline inflation rate decreased to 24.48 percent in January, following a rebase, down from 34.80 percent in December 2024. Moreover, during the 299th monetary policy meeting held in February, the Monetary Policy Committee (MPC) decided to keep the Monetary Policy Rate (MPR) unchanged at 27.50 percent, along with the Cash Reserve Ratio (CRR) for both deposit money banks and merchant banks.
Analysts from Meristem Research expressed optimism regarding the prevailing monetary policy stance, suggesting it could foster positive sentiment towards equity assets. They anticipate that as the earnings season progresses, purchasing interest may outstrip selling pressure, as investors prepare for companies’ full-year financial results and dividend announcements.
Nonetheless, in the last trading week through February 28, Nigeria’s equities market witnessed a decline of 0.62 percent, primarily attributed to selling pressure on banking, insurance, and oil & gas stocks, resulting in a closing downturn for the week as purchasing support from dip buyers was insufficient.
In summary, Nigeria’s stock market experienced a positive trend in February, with a growth of N2.5 billion driven by strategic investor activities in select sectors. However, certain segments like banking and oil & gas faced declines, leading to mixed trading conditions. The stability of monetary policy and a positive inflation report may encourage further buying interest as investors await corporate earnings updates.
Original Source: businessday.ng
