Investment analysts and economists at Bancorp Securities Limited, a leading stockbroking and investment consulting firm in Nigeria, on Tuesday predicted that trading in Nigeria’s equities market this week would be characterized by mixed sentiment, with no major catalysts expected to drive momentum
In the firm’s ‘Weekly Stock Recommendation 21st-25th 2025’ Note circulated to our correspondent, the experts noted that last week, macroeconomic data reflected renewed inflationary pressure in March 2025 and continued liquidity expansion, despite the Central Bank’s monetary tightening stance.
Recalling that the equities market sustained a bearish trend for the third consecutive week, the analysts noted that last week the NGX All-Share Index (NGXASI) declined by 0.32% week-on-week to close at 104,233.81 points, dragging the year-to-date return to 1.27%.
According to them, the week’s downturn was driven by profit-taking and markdowns in GTCO, ZENITHBANK, and NNFM, among others.
This is even as the market capitalization also dipped by N207.07 billion to N65.50 trillion just as total trading volume and value weakened. Weekly volume traded fell by 27.17% to 1.52 million units, while market turnover declined by 18.81% to N43.00 billion across 51,156 deals.
On the outlook and implications on the economy and markets Nigeria’s macroeconomic landscape, the Bancorp Securities’ experts noted that the economy continued to reflect a complex interplay of cost-push inflationary pressures, aggressive monetary tightening, and a liquidity paradox.
They pointed out that the March inflation at 24.23% year-on-year, with a staggering 3.90% month-on-month increase, suggested that price instability remains entrenched, particularly in food and transport segments.
This is even as they maintained that despite relative exchange rate stability during the review period, structural bottlenecks such as logistics inefficiencies and energy-related cost shocks were undermining monetary policy transmission, adding that more concerning is the sustained expansion in broad money supply (M3), which reached N114.22 trillion, despite a historically high 50% Cash Reserve Ratio (CRR).
The experts further clarified: “The divergence between policy intent and liquidity outcomes suggests that quasi-fiscal activities, including Ways and Means advances and FX interventions, may be counteracting the Central Bank’s tightening stance.
“While the surge in net foreign assets signals improved external sector performance, likely driven by higher oil receipts, remittances, or foreign portfolio inflows, the contraction in net domestic assets indicates weaker credit creation or sterilization of liquidity via policy tools.
“Looking ahead, inflation is expected to remain elevated in the near term, likely peaking in Q2 before moderating mildly in the second half of the year, assuming sustained FX stability, improved harvest cycles, and no fresh energy price hikes. However, with month-on-month inflation accelerating faster than seasonal trends, the risk of a wage-price spiral remains high, especially if upcoming fiscal reforms (e.g., new minimum wage negotiations) are not complemented by productivity gains.
“The broader implication is that Nigeria remains caught in a policy dilemma: tightening monetary policy to fight inflation risks stifling already weak domestic demand, while expansive fiscal spending could undermine price and FX stability.
“In this context, coordinated fiscal-monetary actions such as targeted subsidy reforms, FX market liberalization, and inflation-linked social support programs will be crucial to easing macroeconomic imbalances without derailing fragile growth prospects”, the firm’s analysts added.
Specifically, on the outlook for the equities market, they predicted: “We anticipate a week of mixed sentiment in the equities market, with no major catalysts expected to drive momentum. In the absence of fresh triggers, investor activity may remain largely driven by profit-taking and cautious repositioning ahead of the May MPC meeting. The elevated yields in the fixed income space are also likely to continue weighing on risk appetite, keeping overall market mood subdued.”
