January Trend On NGX Kicks Off Positive Momentum Ahead Of Unaudited Q4 Numbers

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It is obvious that 2024 was a great year for the Nigerian stock market, as investors and traders recorded a high on the Nigerian Exchange (NGX) a few ticks below 106,088 basis points on February 19, 2024. At the close of trading for the year, market’s performance 37.65% return beat the nation runaway inflation of 34.6%, closing the year at 102,926.40 bps.

This was despite the inflationary pressure in the year 2024 and weak macroeconomic indices.

Earnings momentum on the exchange and corporate actions supported the market and stock prices to create wealth for discerning investors and smart traders. This trend is likely to repeat itself in 2025, as Investdata five fundamental models confirm that the breadth and power of the overall stock market is still expanding. This is supported by the fact that the top 65% of our 5-factor fundamental model now perform well, up from the top 55% in the previous quarter.

Also, the NGX’s earnings are accelerating their gains from 12.15% in the third quarter to over 15% for the next three quarters. We are especially excited about stocks with:

positive analyst earnings revisions and market expectations
robust operating margin expansion, and

(3) accelerating sales growth expected in Q1 and first half of 2025.

NGXASI Monthly Chart (Opening chart)

The NGX had a short trading week due to the New Year’s holiday declared by the Federal Government on Wednesday, January 1, 2025. Despite the reduced trading days, market activity was robust, with a total of 2.618bn shares worth N69.742bn traded across 47,953 deals. This was a significant increase compared to the 1.387bn shares valued at N52.023bn exchanged in 33,411 deals in the previous week.

NGXASI Weekly Chart

The Financial Services Industry led the market in both volume and value terms, accounting for 66.88% of the total turnover volume and 24.49% of the total value. This was followed by the Services Industry, which recorded 205.807m shares valued at N1.829bn, and the ICT sector, which contributed 189.938m shares worth N1.844bn.

In terms of sector performance, the NGX All-Share Index gained 1.42%, closing at 103,586.33bps, while market capitalization rose by 2.02%, closing at N63.166tr. Other indices, with the exception of the NGX Oil and Gas and NGX Sovereign Bond indices, finished in the positive territory. The NGX Oil and Gas index saw a slight decline of 0.45%, while the NGX Sovereign Bond index dropped by 3.28%. The NGX ASeM and NGX Commodity indices remained flat.

Top Price Gainers

Prestige Assurance Weekly Chart

The top gainers this week were primarily companies in the insurance and pharmaceutical sectors, reflecting positive investor sentiment. Prestige Assurance Plc topped the gainers list, recording a 46.00% increase in its share price, closing at N1.46 from an opening price of N1.00. Neimeth International Pharmaceuticals Plc followed closely with a 45.26% increase, closing at N2.76, up from N1.90.

Sovereign Trust Insurance Plc experienced a 45.16% rise in its share price, ending the week at N1.35. Coronation Insurance Plc also saw a notable increase of 44.92%, closing at N2.71. Finally, Universal Insurance Plc rounded out the top five gainers with a 43.64% increase, closing at N0.79.

Top Price Decliners

PZ Cussons Weekly Chart

On the flip side, the biggest decliners were in the consumer goods and technology sectors. Led by PZ Cussons Nigeria Plc which saw the largest cut, losing 13.79% of its value at N25.00 from an opening price of N29.00. CWG Plc followed with a 10.83% decrease, closing at N7.00 from N7.85.

Union Dicon Salt Plc experienced a 10.00% drop, closing at N7.20. Nigerian Exchange Group also saw a significant decline of 9.17%, closing at N27.25. Cadbury Nigeria Plc rounded out the top five decliners with a 6.52% decrease, closing at N21.50.

Conclusion

In conclusion, the Nigerian stock market displayed positive growth during the week, with significant increases in both the NGX All-Share Index and market capitalization. The Financial Services sector remained dominant, while the top gainers were primarily from the insurance and pharmaceutical sectors. Conversely, the consumer goods and technology sectors faced challenges, with several companies experiencing notable declines in their share prices.

As the market progresses into the new year, investors will be watching closely for further developments in the local economy and the performance of key industries, particularly in light of global economic trends.

NGXASI Daily Chart

Trending in the Economy: Organised Labour is advocating for an annual adjustment of the ₦70,000 minimum wage to counter Nigeria’s inflationary pressures. Trade Union Congress President, Festus Osifo, argued that waiting for between three to five years for wage reviews is inadequate. He is proposing yearly adjustments based on inflation rates reported by the National Bureau of Statistics.

The proposal aims to align wages with real-time economic realities, addressing the rising cost of living exacerbated by subsidy removal and increased energy costs. Labour’s demand coincides with President Tinubu’s pledge to curb inflation to 15% by the end of 2025.

Global Market and Oil: Global stocks rose on Friday but remained set for a weekly decline, while the US Dollar stalled after recent gains, supported by a stronger-than-expected U.S. manufacturing report.

U.S. stocks rebounded, with the S&P 500 and Nasdaq gaining over 1%, ending a five-session losing streak. All S&P sectors saw gains, led by a 2.42% rise in consumer discretionary stocks.

The Dollar surged late last year, driven by expectations of growth and inflation from President-elect Trump’s policies, which also boosted Treasury yields. The Fed’s December statement reduced future rate cut expectations for 2025.

Ross Mayfield, investment strategist at Baird, noted that the rally continued despite higher yields, indicating market strength.

The Dow gained 339.86 points (0.80%) to 42,732.13, the S&P 500 rose 73.92 points (1.26%) to 5,942.47, and the Nasdaq increased 340.88 points (1.77%) to 19,621.68. For the week, the S&P 500 dropped 0.48%, the Nasdaq fell 0.51%, and the Dow lost 0.6%.

MSCI’s global stock index rose 0.90%, set for its biggest daily gain since November 7, but still on track for a third weekly loss in four.

European stocks closed lower, with the STOXX 600 down 0.49%, pressured by luxury and alcohol stocks but posting a second consecutive weekly gain. Trading volume was light due to a holiday-shortened week.

The US Dollar index fell 0.29% to 108.90, recovering briefly after the strong U.S. manufacturing survey but still set for a fifth straight weekly gain.

Oil prices rose on Friday, supported by cold weather in Europe and the U.S., and additional Chinese economic stimulus. Brent crude increased by 69 cents (0.9%) to $76.62 per barrel, and U.S. WTI crude gained $1.11 (1.5%) to $74.24. Brent was set for a 3.3% weekly gain, while WTI was on track for a 5% increase.

Chinese economic measures, including wage hikes and increased treasury bond issuance, supported demand, along with colder temperatures in Europe and the U.S. U.S. crude stockpiles fell by 1.2 million barrels, while gasoline and distillate inventories increased.

Despite price gains, the dollar’s rise, driven by expectations of stronger U.S. economic performance and higher interest rates, limited further oil price increases.

Sectorial Indexes Charts For the Week

NGX Banking Index Weekly Chart