NGX rally deepens as investors gain N5.51trn in one week

INVESTORS on the Nigerian Exchange Limited (NGX) recorded another remarkable week, adding a massive N5.51 trillion to their portfolios. This fresh surge extends what has already become a historic bull run in 2026, with the Nigerian equities market standing out as one of the strongest performers among frontier markets globally.

The rally has been largely driven by sustained demand for large-cap stocks and a steady flow of positive corporate earnings. Investors are increasingly positioning in fundamentally strong companies, reflecting growing confidence in the broader market outlook and Nigeria’s ongoing economic adjustments.

Market capitalisation has now climbed close to N145.34 trillion, a sharp rise from N99.38 trillion at the beginning of January. This translates to a year-to-date return of about 45.04 percent, underscoring a major revaluation of Nigerian equities. Analysts attribute this to structural reforms and the successful conclusion of the banking sector recapitalisation exercise earlier in March, which has strengthened confidence in financial stocks.

The benchmark NGX All-Share Index (ASI) has mirrored this strong upward movement, recently breaking past the 225,000-point mark to close at 225,722.49. This milestone highlights how far the market has come, especially considering that the 100,000-point level was once seen as a long-term target not too long ago.

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Despite the strong rally, analysts maintain that opportunities still exist across several sectors. Many companies with solid fundamentals are still trading at valuations that are considered attractive relative to their earnings potential and future growth prospects. This suggests that the market may still have room to expand, even after its impressive gains.

However, market breadth showed signs of caution during the week. A total of 46 stocks recorded gains, fewer than the previous week’s 61 gainers. Meanwhile, 53 stocks declined, up from 36, and 47 equities remained unchanged. This indicates that investors are becoming more selective, carefully choosing where to allocate capital rather than buying broadly across the market.

In anticipation of Nigeria’s return to Frontier Market status later in the year, there has been a noticeable shift of funds into value stocks. Leading companies such as Seplat Energy, Zenith Bank, MTN Nigeria, Airtel Africa, Guaranty Trust Holding Company, First Holdco, Aradel Holdings, and United Bank for Africa have been key beneficiaries of this early repositioning by investors.

At the same time, pension fund administrators and other institutional investors are increasing their exposure to equities as a hedge against inflation. With fixed-income returns under pressure, the stock market has become a more attractive destination for liquidity, further supporting the bullish trend.

While concerns about the market being overbought have emerged, many analysts argue that the current momentum reflects a deeper structural shift rather than a speculative bubble. They note that strong liquidity inflows into banking, industrial, and consumer goods stocks continue to underpin the rally.

That said, the pace of gains may begin to moderate. Analysts expect more sector rotation, selective positioning, and intermittent profit-taking as investors respond to changing valuations and incoming corporate earnings. The next major driver of market direction is likely to be the continued release of company results.

Corporate performance has already played a major role in sustaining the rally. Many firms posted stronger-than-expected full-year 2025 results and impressive first-quarter (Q1) 2026 earnings. Notably, companies in the consumer goods and energy sectors delivered triple-digit profit growth, which has translated into higher dividend payouts and increased investor interest.

Trading activity has also surged significantly. Total transactions reached N4.14 trillion in the first quarter of 2026, marking the highest quarterly trading value ever recorded. This figure is nearly double the N2.23 trillion reported in the same period of 2025, highlighting a sharp increase in market participation.

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A closer look at monthly activity shows a steady rise in trading volumes such as N861.9 billion in January, N1.54 trillion in February, and N1.74 trillion in March. This consistent growth reflects increasing investor engagement and confidence in the market.

Domestic investors have been the dominant force behind this activity, accounting for about 86.94 percent of total transactions, valued at N3.606 trillion. In contrast, foreign investors contributed N541.99 billion, representing 13.06 percent of total trades in the first quarter.

“With market capitalisation already above N145 trillion, the N150 trillion milestone is now within reach, provided the current positive sentiment and liquidity inflows are sustained,” said a Lagos-based investment analyst, Mr Odion Oghala.