As of mid-February 2025, the Nigerian inventory market, tracked by the All-Share Index, reveals a promising upward trajectory, after a robust efficiency within the fourth quarter of the earlier yr.
All through 2024, the index achieved a powerful year-to-date improve of 37.7%, with a exceptional 39% surge in January alone.
Nonetheless, this momentum encountered challenges within the second quarter of 2024, because the All-Share Index skilled a decline from 104,566.20 originally of April to 98,255.63 by the month’s finish.
In the end, the index closed the second quarter down by 4.3%, shedding 4,508.71 factors as uncertainties about {bank} recapitalization efforts weighed closely available on the market.
The primary quarter of 2025 has so far mirrored the bullish pattern of Q1 2024, with the index climbing over 4,800 factors and surpassing the 107,500-mark as of February 13, 2025.
Contemplating this, the query at hand is how the index will carry out within the upcoming second quarter of 2025, particularly given the retracements that plagued the identical interval final yr. To navigate this uncertainty, insights from business specialists have been sought on this work.
Market pattern in 2025 so far
The All-Share Index is at present experiencing sturdy bullish momentum that started intensifying round December 2024 and continued into January 2025.
Nonetheless, sure technical indicators, together with the Relative Energy Index and the Stochastic Oscillator, level to an overbought situation within the broader market, suggesting {that a} retracement or reversal may very well be on the horizon.
In an interview, Samuel Oyekanmi, analysis lead at Norrenberger, expressed optimism for the Nigerian equities market, predicting a big rise in investor curiosity within the second quarter which might spur a constructive pattern.
Oyekanmi defined, “As yields on debt securities decline, we may even see extra traders shifting their focus to equities.” He identified that though debt devices are usually considered as safer investments, the present decline in yields might immediate extra traders to shift their focus towards equities.
He supplied information from the Debt Administration Workplace (DMO), highlighting that Nigeria’s Eurobond yield fell to 9.13% on February 4, 2025, down from 9.21% the day past—a lower of seven.76 foundation factors and the bottom yield seen in practically 39 days.
“The final time we recorded a decrease common was on December 11, 2024, at 9.095%,” he added.
Oyekanmi additionally identified a drop in Treasury invoice yields, stating, “The yield on Nigeria’s one-year Treasury invoice public sale decreased from 29.65% to 29.21%, marking the second consecutive decline.”
He continued, “These decrease yields might encourage extra funding in equities throughout Q2, particularly given the sturdy efficiency of sure shares thus far this yr.”
One other business skilled, Mr. Olatunde Amolegbe, MD/CEO of Arthur Steven Asset Administration, expressed a constructive outlook for the All-Share Index within the second quarter of 2025, suggesting the market might both stabilize or achieve extra momentum.
“I anticipate a steady market or additional worth will increase in Q2,” he remarked.
Amolegbe highlighted a number of favorable basic components at present influencing the market, together with speedy recapitalization within the banking sector and elevated manufacturing within the oil business.
He additionally famous the numerous public curiosity in current market choices, signaling a rising urge for food amongst traders for equities.
“The banking recapitalization course of is progressing swiftly, as evidenced by the current launch of allotment outcomes. Public choices have attracted sturdy investor engagement,” he acknowledged.
Relating to anticipated company bulletins in Q2 2025, he added, “We might witness favorable company information that might positively influence investor sentiment.”
Samuel Oyekanmi additional underscored that the spectacular year-to-date efficiency of sure bullish shares in 2024 might draw traders who beforehand favored debt securities into the equities market.
He identified that spectacular year-to-date returns seen in some equities in 2024 are more likely to entice traders wanting to seize such profitable alternatives.
“Regardless of the inherent dangers, traders are in pursuit of considerable returns, which equities delivered final yr with compelling year-to-date efficiency,” he concluded.
For Chris Njoku, Multi-Property Portfolio Supervisor at FBNQuest, the prospect of latest listings on the Nigerian Alternate (NGX) might increase the All-Share Index.
“There are prospects that we would see some new listings in Q2, together with NNPC and Dangote Refinery.”
Wanting forward, the market reveals a transparent distinction.
Specialists predict that traders not happy with returns from debt securities might more and more shift to equities in Q2, particularly if favorable situations in key sectors like banking and oil proceed.
Specialists predict that traders not happy with returns from debt securities might more and more shift to equities in Q2, particularly if favorable situations in key sectors like banking and oil proceed.
In consequence, fairness markets might draw these looking for higher returns, paving the way in which for notable funding developments.
