Pension Reforms Spark NGX Rally as Market Gains N6.79tn in Historic 6.16% Surge

Nigeria’s stock market delivered one of its strongest weekly performances in recent memory after sweeping pension reforms triggered a wave of institutional buying. The benchmark Nigerian Exchange Limited (NGX) All-Share Index surged by 6.16 per cent to close at a record 182,313.08 points, adding an impressive N6.79tn to investors’ wealth. Market capitalisation climbed to N117.03tn, underscoring renewed confidence among both local and foreign participants.

The rally followed a significant policy shift by the National Pension Commission (PenCom), which raised equity investment limits for Pension Fund Administrators managing Retirement Savings Account funds. The move allows PFAs to allocate a larger portion of their assets to equities, unlocking fresh liquidity into the market. Almost immediately, institutional investors began accumulating medium- and large-cap stocks across major sectors, setting off a broad-based rally.

Trading activity reflected the renewed appetite for risk. A total of 4.652 billion shares valued at N193.33bn were exchanged in 286,751 deals, compared to 3.860 billion shares worth N128.58bn traded the previous week. The Financial Services industry dominated activity, accounting for nearly 60 per cent of total traded volume, as banking stocks drew heavy interest from portfolio managers repositioning ahead of potential further gains.

Sectoral performance painted a picture of widespread optimism. Oil and Gas stocks led with an 11.40 per cent jump, powered by gains in Seplat Energy and Aradel Holdings. Industrial goods followed strongly, with Lafarge Africa and Dangote Cement advancing significantly. The banking index also posted solid growth, buoyed by Guaranty Trust Holding Company and Access Holdings. In the consumer goods space, Nestlé Nigeria and Dangote Sugar Refinery recorded notable double-digit gains, reflecting strong investor confidence in fundamentally sound companies.

Despite the euphoria, analysts are urging caution. Experts at AIICO Capital and Cowry Asset Management expect mixed sentiment in the coming week. While improved liquidity from pension fund allocations provides a solid floor for prices, the sharp rally may encourage short-term profit-taking. For many investors, however, the reforms signal something deeper — a structural shift that could strengthen long-term participation in Nigeria’s capital market and sustain momentum beyond the immediate surge.

source: punch