Nigerian Stock Market Gains N3.5 Trillion in Q1 2025 Amid Strong Corporate Earnings and Federal Reforms

The Nigerian stock market saw an impressive surge in the first quarter of 2025, with a gain of N3.49 trillion. This growth was attributed to a combination of positive investor responses to mixed corporate earnings from 2024 and ongoing federal government reforms. Compared to the same period in 2024, the market’s capitalization rose significantly, increasing by N18.2 trillion. The overall market capitalization as of March 28, 2025, stood at N66.257 trillion, marking a 5.6% increase from the previous year’s close.

The market’s strong performance was largely driven by sentiment-driven trading and a surge in banking stocks, buoyed by the Central Bank of Nigeria’s recapitalization initiatives. In January 2025, the market saw a cautious increase of N1.95 trillion, followed by a larger gain of N2.48 trillion in February. However, March recorded a slight downturn, with a N936 billion decrease as investors sought alternatives in money market options. Despite this, the NGX All-Share Index rose by 2.66%, reflecting the overall positive market trend.

A key factor in the market’s growth was the reduction in inflation rates, which dropped to 23.18% from 24.48%, offering relief to investors. Additionally, attractive dividend payouts from major companies such as Zenith Bank, UBA, and GTCO played a significant role in boosting investor confidence. In the final week of March, trading activity surged dramatically, with a 159.2% increase in volume and a 730.04% jump in value, reflecting heightened institutional participation.

Sectoral performance was predominantly positive, with the Industrial Goods and Financial Services sectors leading in turnover. The NGX Banking Index saw notable gains, particularly from stocks like GTCO, which increased by 18.2%. Looking ahead, analysts expect the bullish trend to persist as the market enters earnings season, with sustained interest in blue-chip stocks due to ongoing dividend declarations. However, the possibility of increased volatility from profit-taking and portfolio rebalancing remains a concern.

Source: The sun