Market Roundup for June

It was a bullish and eventful month, as Nigeria’s equity market witnessed strong positive sentiment and inflow of funds which pushed the composite All-Share index’s action to breakout various psychological lines between 113,000 and 121,000 basis point, hitting a new all-time high of 121,264.20bps. This sustained the Q2 quarter bullish momentum before pulling back on profit taking and portfolio rebalancing at the end of the quarter window dressing, as well as the Q3 earnings expectations.

Despite uncertainties due to the U.S trade policy and geopolitical tensions across the globe, the improving macroeconomic indicators in Nigeria, and the better-than-expected corporate earnings emanating from quoted companies. There were enough to boost investor confidence, thereby weighing on the benchmark index following which it recorded 7.37% and 13.55% returns respectively for the month and second quarter, reflecting the sustained investor confidence.

However, all eyes are on the impacts of these developments and shifts in the nation oil and gas sector in the aftermath of the the rebasing of Nigeria’s GDP and inflation variables to support and drive economic growth. The handshake between the fiscal and monetary authorities to fashion policies that will sustain the improvements in macroeconomic data and economic recovery in the midst increasing insecurity challenges today is noteworthy.

The inflation rate for the month of May is expected by mid-July, while the Central Bank of Nigeria has scheduled its policy meeting for later in the month, even as the liberalization of power sector is yet to impact positively on the economy. It is worthy of note that the twin evils of sustained increases in electricity tariff and inadequate supply remain major drivers of inflation, and the situation is made even worse by the equally unholy combination of high interests and insecurity as mentioned earlier.

Momentum accelerated in Q2 as investor confidence strengthened, following favourable corporate earnings, clarifications concerning dividend payment status of banks amid the regulatory forbearance concerns. There was also the impact of renewed interests in consumer goods and growth stocks, which saw the NGXASI post a robust quarterly gain of 13.55% gain, driven by consistent monthly advances of 0.13% in April, 5.62% rally in May, and an impressive 7.37% jump in June, marking the market’s highest monthly gain this year.

Besides the impact of renewed investor confidence, the performance of the NGX in H1 2025 shows  the effect of good positioning despite the intermittent headwinds from monetary tightening and regulatory uncertainties. Analysts expect this positive momentum to continue into Q3, which is however contingent on stable macroeconomic policy signals and favourable H1 2025 earnings results releases by quoted companies.

The Nigerian equity market closed the first half of 2025 with mixed sectoral performances, driven by macroeconomic policy adjustments, sector-specific news, and investor sentiment. The NGX Consumer Goods Index outperformed the sector with an impressive year-to-date return of 52.21%, driven by strong Q1 earnings releases and positive investor sentiment towards Fast-Moving Consumer Goods (FMCG) companies, which have demonstrated resilient pricing power amid inflationary pressures.

The NGX Growth Index also recorded a significant YTD growth of 45.13%, driven by a rally in select mid-cap stocks in June, rising by 20.63% alone as investors rotated into growth stocks ahead of H2 positioning. Similarly, the NGX Lotus Islamic Index gained 32.69% YTD, supported by strong performance from Shariah-compliant stocks, while the NGX Pension Index closed up 28.26% YTD, reflecting robust asset allocation flows from institutional investors

In all of these, the changing NGX’s index action and price patterns call for cautious, even as pullbacks and market correction create opportunities to buy low and sell high. Already, the market is in its distribution phase in the midst of the nation economic recovery, even as crude oil is already selling below the country’s 2025 budget benchmark price of $75 per barrel. This retracement on the exchange is temporal, judging by the economic realities as shown in the latest reports of the World Bank and International Monetary Fund (IMF) that the Nigerian economy growth will at 3.6% this year. The key performance index for the first half of 2025 recorded almost 17% gain on a high traded volume in the midst of improving corporate earnings and positive sentiment.

Meanwhile, in the 18-trading sessions on the NGX in the month of June, the benchmark index recorded 12 trading days of up market and six sessions of down market, even as the index oscillated in the midst of uptrend and position taking on strong momentum ahead of expected company’s numbers that will reveal the state of the stocks and give insight into value.

Specifically, the composite NGXASI for the month inched 8,236.56 basis points higher to close at 119,978.60bp, after touching high of 121264.23 and low of 111,650.80 from an opening figure of 111,742.00bp, representing 7.37% up.

The buying volume of total transactions for the month was 83.7%, while selling position was 13%, extending previous month’ bull market as volume index for the period was 1.31. Market capitalization for the period rose by N5.49tr to N75.95tr, from an opening value of N70.46tr, representing 7.79% value gain, higher than the index due to listing of some bank’s primary activities and listing of companies. Also, the market witnessed buying sentiments and reactions to improving macroeconomic data and audited reports of march year end accounts. Transaction volume during the month increased by 9.49%, as investors traded 13.85bn shares, compared to the previous 12.65bn units.

The NGXASI’s year-to-date gained 16.57%, just as market capitalisation stood at N76tr, representing 22.21% gain YTD from the opening value.

Market breadth for June was strongly positive as advancers outpaced decliners in the ratio of 96:35, thereby  extending  the bullish transition, on recovery of the economy, buying sentiment, and the strong numbers of quoted companies with December year-end that had released first-quarter earnings reports. The earnings reports were impressive and higher than market expectations, especially from the consumer goods, oil, agri-business and services sector, which helped the manufacturing companies and others to emerge among the best performing in the month June.

The sectoral performance chart below shows that the NGX Premium and consumer Goods propelled the market the most in the period under review after gaining 12.34% and 10.75% respectively, compared to the 7.37% recorded by the benchmark NGX All-Share Index. It was followed by the NGX Pension which rose by 10.61%, reflecting the confidence investors reposed in such stocks, and entrance of institutional players. This was followed by the NGX Insurance index, which was up by 10.33% for the month, arising from their low-price attractions, after they had pulled back in the previous months. There was also the impact of the relatively low Price-To-Earnings attraction in the market and sectors, which also helped indexes like NGX Premium and NGX 30 to close in green. As other indexes closed higher for the period.

Best Performing Stocks for June

The month’s best performer was Ellah Lakes, a player in the agribusiness space on the NGX, which is  poised to benefit from the low price attraction and positive sentiment for its sector amidst market operator’s hype. Ellah Lakes’ share price soared by a significant 135.05% in the month, compared to its opening price; followed by Neimeth Pharmaceutical, which chalked 110.65%; while Fidson Healthcare grabbed 57.99%; ahead of the 48.15% by Berger Paints.

Overall, other companies at the top gainers of June’s included: Champion Breweries 47.062%; and Beta Glass, 43.54%.

Worst Performing Stocks for June

The top laggard of the month was Northern Nigeria Flour Mills (NNFM), which lost 22.25% on profit taking, amid what the market generally considers a miserly final dividend of 35 kobo relative to its share price. NNFM was followed by VFD Group which shed 21.91% as investors sold off their bonus shares in exchange for cash; Conoil fell by 21.34%; Julius Berger, 18.25%; and ABC Transport, 16.95%; on the back of profit booking and weak sentiments for these stocks.

Technical View on Monthly Time Frame

The NGX’s index action has remained technically on an uptrend in a bullish channel for over six years, in the midst of positive sentiments and volatility as market fundamentals continued to change. The inflow to equity assets as revealed by the money flow index was strong to read 59.34 looking up, even as RSI stood at 82.22 in the face of portfolio repositioning on expected financials.

What to expect in July and August

• Release of quarterly and half-year earnings reports. These blue-chip companies’ earnings reports will strengthen market fundamentals, if Q2 numbers beat expectation.
• Continuation of the oscillating trend of equity prices as a result of the repositioning of portfolios along the line of positive numbers and profit-taking. Also, due to the upcoming MPC meeting, the second half of this year will be dominated by mixed sentiments depending on the peace talk as geopolitical tensions influence volatility.
• Market outlook for July is mixed, depending on the state of the expected corporate earnings and market reaction to the numbers.
• The sustained relatively fair valuation in the market may trigger high demand for stocks as players realign their portfolios. However, there is a need to invest wisely, using bids, offers, and volume when making decisions as a trader.
• Managing risk and protecting capital at this point is very important, so you will be able to determine when to buy or sell, by watching stocks and the market, using technical analysis.  Look for investdata daily sentiment report and join the 12 noon live session every Mondays, Wednesdays and Fridays.
• Let numbers released by the companies guide your decision and time to stay in that position.
• Full-year earnings reports of March year-end companies will start hitting the market this month until June.

As the market phase is changing, it is time to combine fundamentals and technical tools to make decisions by knowing the support and resistance levels to reposition or exit any position. You must know the market cycle, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup/ Q & A session with Ambrose Omordion.

Ambrose Omordion
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