Investment experts at Bancorp Securities Limited, a leading investment and stockbroking consultancy services provider in Nigeria, have projected a mildly bullish bias in the Nigerian equities market this week as selective accumulation in fundamentally strong sectors, particularly the banking and consumer goods sectors, continues to support upward momentum
The analysts, in the firm’s ‘Weekly Stock Recommendation 2nd-6th June 2025’ Note circulated to our correspondent on Monday, recalled that the equities market rebounded last week from the previous week’s loss, as the NGX All-Share Index (NGX-ASI) gained 2.49% week-on-week, closing at 111,742.01 points on Friday.
According to them, the recovery was broad-based across most sectors, with all sector indices closing positive except for the Oil and Gas index, which declined. In addition, the experts noted that the market also recorded a significant increase in capitalization, as total market value rose by N1.71 trillion to N70.46 trillion at the close of its trading sessions last week.
However, they reported that the trading activity was mixed as while total volume declined by 3.51% to 3.80 million units, total value appreciated by 59.59% to N119 billion, spread across 89,636 deals.
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The experts pointed out that despite the dip in total volume, technical indicators signalled continued underlying strength.
On the outlook and implications for the economy and the investment markets, the firm’s researchers maintained that Nigeria’s macroeconomic outlook remained delicately balanced as recent data points to rising debt risks, weakened investor confidence, and tentative improvements in trade finance.
For instance, they pointed out that the sharp 92% drop in foreign portfolio inflows in April, despite FX reforms and relative currency stability, reflects deep concerns around fiscal transparency and debt sustainability.
This is even as they observed that Investor sentiment had shifted, with foreign participation falling to just 13% of market activity while the modest growth in Letters of Credit—up 3.68% year-on-year- suggested a slow recovery in trade finance, possibly supported by improved FX liquidity.
The analysts noted, however, that the month-to-month volatility signalled persistent uncertainty among importers and exporters navigating FX constraints.
Meanwhile, they projected that President Tinubu’s latest request forwarded to the National Assembly for $24.14 billion in new external loans, alongside a $2 billion FX-denominated bond and N758 billion in pension bonds, could push public debt beyond N182 trillion by 2026.
The investment researchers also predicted that with debt servicing already consuming over 75% of FX outflows, economists warn that without clear returns on these borrowings, Nigeria’s fiscal position could become increasingly precarious.
They maintained that to restore stability, the Federal Government should prioritize revenue growth, expenditure discipline, and greater transparency, adding that while reforms have laid a foundation, sustained progress depends on how effectively Nigeria balances borrowing with long-term value expectations.
