Investment researchers and analysts at Bancorp Securities Limited, a leading stockbroking and consultancy firm in Nigeria, predicted on Monday that trading in the Nigerian Exchange would sustain its recent momentum this week based on improved investor sentiment and other prevailing indices of the economy.
The experts, in the firm’s ‘Weekly Stock Recommendation 28th April- 2nd May 2025’, noted that last week following three consecutive weeks of decline, the equities market posted a 1.46% WTD gain, closing at 105,752.61 points, pushing the year-to-date return by 2.75% even as the market capitalization also rose by N965.6 billion to N66.46 trillion at the end of the week’s trading sessions.
They linked the equities market’s performance primarily to the release of strong Q12025 earnings results and notable share price appreciation in INTBREW, NASCON, CADBURY, among others, adding that disparity between the NGX-ASI and market capitalization growth is primarily due to the listing of LEGENDINT by introduction on the Main Board of the NGX on Thursday at NGN5.64 per share. Investor sentiment remained positive, reflected in improved trading activity.
The analysts clarified: “With more Tier-1 and mid-tier banks expected to report, sentiment remains bullish, especially ahead of the anticipated second tranche of recapitalization requirements. Meanwhile, favourable system liquidity conditions continue to support credit expansion and earnings growth, providing a conducive environment for sustained sector performance.
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On the macroeconomic outlook and implications for the economy and markets, the Bancorp Securities’ experts maintained that Nigeria’s 2025 economic outlook is cautiously optimistic but highly fragile.
According to them, while GDP growth is projected at 3.6%, recovery remains vulnerable to oil sector risks, underinvestment, and global demand uncertainties even as persistent currency pressures and high inflation, potentially exceeding 26% by IMF estimates, underscore a fragile monetary environment, worsened by exchange rate liberalization and dwindling reserves.
While noting that the January CPI rebasing complicates inflation optics but does little to offset structural pressures from fuel subsidy removal and food supply shocks, they explained that fiscal fragility, elevated debt service costs, and limited fiscal space threaten targeted social spending, risking deeper poverty and social instability.
The investment experts further stressed that sustained policy credibility, through subsidy reforms, non-oil revenue mobilization, and FX market stability, would be critical, warning that without aggressive, coordinated reforms, Nigeria risks sliding into stagflation marked by weak growth, persistent inflation, and worsening living standards.
They warned that though growth prospects exist but were brittle and that failure by the government to consolidate reforms could quickly unravel macroeconomic stability.
Specifically on the equities market this week, the researchers projected: “We anticipate that the market will sustain its recent momentum in the coming week, supported by improving investor sentiment and the commencement of Q1 earnings releases, which are likely to guide market direction and reinforce buying interest.”
