Analysts Predict Shift to Fundamentally Strong Stocks in Nigeria’s Stock Market Rally

As year-end trading activities gather pace, capital market analysts say investors are increasingly concentrating on fundamentally strong stocks with attractive valuations, reflecting confidence in companies with solid earnings and balance sheets. This trend comes as liquidity expectations and portfolio adjustments shape investment decisions in the final stretch of the year.

The Nigerian equities market sustained its December rally last week, driven by renewed optimism and stronger buying interest. Market participants positioned ahead of anticipated year-end liquidity inflows, pushing key indicators higher and reinforcing positive sentiment across major sectors of the market.

According to Cowry Assets Management Limited, the market’s upward momentum remains intact as investors continue to rotate into quality stocks. The firm noted that this shift is largely driven by expectations of increased liquidity typically associated with year-end activities, which often favours fundamentally sound companies.

Similarly, Imperial Asset Managers Limited said investor sentiment remains broadly constructive, supported by sustained interest in liquid and fundamentally strong stocks, particularly within the banking, industrial and consumer goods sectors. While the firm cautioned that some profit-taking could emerge in stocks that have already posted strong gains, it stressed that overall market resilience remains supported by portfolio rebalancing and demand for blue-chip, dividend-paying equities.

For the week under review, the benchmark All-Share Index rose by 1.63 per cent to close at 149,433.25 points, edging closer to the 150,000 mark. Market capitalisation gained ₦1.54 trillion to close at ₦95.264 trillion, underscoring the growing confidence of investors as the year draws to a close and reinforcing expectations that fundamentally strong stocks will remain in focus heading into the new year.