NGX Consolidates Amidst Strong Corporate Earnings, High Payout Ahead Q1 Scorecards

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It was a mixed trend on the Nigerian Exchange in the three sessions of trading last week in the aftermath of the Id el Fitri holidays declared by the Federal Government on Monday and Tuesday. Trading started on a negative note pulling back to halt the previous gain amid profit taking and market reactions to recent earnings releases. The benchmark NGX All-Share Index inched up on Thursday before sliding on Friday as it closed the week marginally lower. Volatility and sideways movement continued on the exchange ahead of macroeconomic data and the first quarter earnings expected to give market direction and insight on the state of the nation’s economy.

NGXASI Weekly Chart

Pullbacks on the NGX impacted year-to-date returns, cutting it to 2.51%, with market capitalization settling at N66.147tr, and the benchmark Index at 105,511.89 points. While the NGX 30 inched up by 2.82%. The Banking Index gained by 7.19%, followed by the Pension Index’s 6.09%, while on the flip side, the Insurance Index has lost .73% YTD, as the Consumer Goods Index increase by 3.90%. However, the Oil and Gas Index recorded a negative return of 10.41%. In terms of market breadth, 23 stocks advanced, while 51 declined.

VFD Group Weekly Chart

Leading the top gainers chart for the week was VFD Group Plc, a proprietary investment company founded in 2009, which recorded a 20.76% increase in its share price, rising from N47.20 to N57.00, ahead of Union Dicon Salt Plc with a 19.59% gain, as its stock moved from N4.85 to N5.80 each. Africa Prudential Plc appreciated by 15.71%, with its price advancing from N13.05 to N15.10. Nigerian Exchange Group gained 11.90%, climbing from N29.00 to N32.45. UPDC Real Estate Investment Trust also saw a positive movement, gaining 10.91% as it moved from N5.50 to N6.10.

UACN Weekly Chart

Among the decliners, UACN Plc, a diversified Nigerian conglomerate with operations spanning the food and beverage, real estate, paints, and logistics sectors. Established in 1931, the company topped the list with an 18.31% drop in price, falling from N35.50 to N29.00. Sunu Assurances Nigeria Plc lost 13.38%, dropping from N6.65 to N5.76. Universal Insurance Plc fell by 13.33%, moving from N0.60 to N0.52. Oando Plc shed 13.13%, with its share price down from N48.35 to N42.00. Consolidated Hallmark Holdings Plc followed with 12.85%, after its price slid from N3.58 to N3.12.

Trending in the Economy: Nigeria’s net forex inflow climbed 14.99% to $17.39 billion in Q4 2024, driven by a sharp 47.55% rise in autonomous inflows, while CBN inflows dipped by 4.05%. Despite a 31.37% increase in outflows to $10.42 billion, stronger inflows improved liquidity, boosted foreign reserves by $2.35 billion, and helped stabilize the naira. Remittances surged 130% to $553 million. Even as Purchasing Managers’ Index for the month of March inched higher to read 54.30 points, from 53.7 points in February, to reveal increasing private sector economic activities. As all eyes are on Consumer Price Index for March which is expected to hit the market on the April 15. This also, may likely throw more light on the state of the economy, just as Nigeria’s benchmark equity market indicator remained mixed amid global concerns over the impact of trade tariffs policy of the Donal Trump administration in the U.S, since assuming office on January 20.

The recent strategic move, as Nigeria and Japan unveiled a naira-based venture capital fund, backed by NSIA and JICA, aimed at supporting startups, minimizing currency risk, and encouraging private sector investment—bolstering economic ties and growth efforts in the midst of uncertainty surrounding the global.

Global Market and Oil: Global markets had their worst week since the pandemic, with the Nasdaq dropping 7.8% to 11,420 and the S&P 500 falling 6.1% to 4,010. This was triggered by President Trump’s tariff hikes, leading China to impose 34% tariffs on U.S. imports. Despite hopes for Fed relief, Chair Jerome Powell signalled no immediate rate cuts, intensifying the selloff and erasing $5 trillion in market value.

Recession fears are growing, with traders expecting four Fed cuts this year. Since Trump’s inauguration, $8 trillion in U.S. equity value has been lost. Barclays predicts U.S. inflation above 4% and a Q4 GDP contraction, while Citi warns of slowing eurozone and Chinese growth. Oil prices fell sharply, with WTI at $58.30 and Brent at $62.10.

Safe havens like Swiss bonds showed stress, with yields dipping below 0%. Policymakers are responding, but more market turbulence is expected.

Despite the market pullbacks and consolidating investors remain cautiously optimistic about the outlook for Q2 2025. As the key factors expected to drive sustained market momentum include continued strong dividend payouts, greater clarity on banking recapitalisation, and easing inflationary pressures.

However, several risk factors could impact market performance in the coming months. Monetary policy adjustments by the CBN, particularly in response to inflation slowing down and exchange rate stability, could influence investor sentiment. External economic conditions, such as tariff policies and advancements in technological innovation, may have significant implications, especially for the consumer goods sector. Additionally, energy transition policies could significantly reshape market dynamics, affecting industries that rely heavily on fossil fuels.

Furthermore, government policies and foreign trade agreements may alter household spending patterns, potentially influencing demand across various sectors. Foreign exchange volatility remains a critical factor, with potential implications for capital inflows, corporate earnings, and overall market stability. While these uncertainties persist, market players expect that sector-specific growth drivers, and a gradual improvement in macroeconomic conditions, will support market growth in Q2 and beyond.

Sectorial Indexes Charts

NGX Banking Index Weekly Chart