Positive Momentum Persists On NGX In February Amid Impressive Corporate Earnings, Profit Booking

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The Nigerian Exchange (NGX) extended its positive outing for the second month of 2025 on the back of an inflow of impressive unaudited corporate earnings performance, amid reactions to the emerging numbers. The recently released macroeconomic indices like the January inflation and Q4 2024 GDP data are looking up in the aftermath of the rebasing of variables to accommodate the changing economic realities, especially in the oil and gas sector of the economy, among others.

These contributed to the decline recorded in consumer price index at 24.5%, compared to 34.84% in December 2024, while the economy grew by 3.8% Year-On-Year in the last quarter of 2024, which represents 12.4% quarter on quarter, making the highest quarterly y/y growth since Q4 in 2021. This also translated to a total growth for the year of 3.4%.

The strong expansion of the broader economy was largely driven by the non-oil sector with a y/y growth of 4.0% in the quarter (annualised: 3.3%), while growth in the oil economy slowed to 1.5% from 5.2% in Q3 of 2024, though annualised growth crystalised at 5.5% aided by low base year effect (the oil economy ended a 3-year and 3- quarter recession spell in Q1:2024). Against this backdrop, the annualised share of the oil economy in the broader macroeconomy increased to 5.5% from 5.4% in 2023.

The mixed sentiment during the period result from profit taking in the last trading weeks of the month and the delay in the release of audited 2024 accounts that started hitting the market in the final trading sessions of February with positive corporate earnings and dividend announcements that is expected to attract funds into the equity space in the new week, even as the outlook for March is mixed. The benchmark All-Share index in the period under review recorded positive close in 11 of the 20 trading sessions, thereby continuing its strong start to the year.

Remarkably, many companies posted strong top and bottom lines for 2024, revealing corporate Nigerian resilient and ability of converting economic headwinds to opportunities that supported their positive scorecards. However, the latest rate pause by the monetary authority, is yet to give a clear direction post-inflation rebasing period, but rate cut in the second half of the year will be a plus for economic expansion and the stock market.

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