The Nigerian Exchange (NGX) has delivered an impressive 27.84% year-to-date return, significantly outpacing the nation’s inflation rate of 22.22%, according to closing figures from last Friday’s trading session.
This performance signals strong investor sentiment, as domestic and international traders continue to increase exposure to Nigeria’s equity market in anticipation of robust corporate earnings and macroeconomic reforms.
The rally has been driven by strategic investments in fundamentally strong sectors such as banking, consumer goods, industrials, and energy. Analysts at MarketForces Africa noted that the NGX return has become a benchmark for evaluating the viability of financial instruments in 2025, emphasizing that any investment yielding below 28% is no longer competitive.
“Inflation-adjusted returns from the Nigerian Exchange have set a new standard. Compared to the debt market where yields average around 20%, the NGX has become the go-to platform for inflation-protected investing,” the report stated.
While the equities market remains bullish, Cowry Asset Limited warned of potential corrections on the horizon. The Relative Strength Index (RSI) currently stands at 92.41, indicating that the NGX All-Share Index is in overbought territory. Nonetheless, technical indicators show the index is still trading well above the trend line, supported by the 50-day Exponential and Simple Moving Averages.
Market watchers believe that the ongoing earnings season, which is expected to bring strong financial results from several blue-chip companies, could further solidify investor confidence.
With foreign portfolio inflows on the rise and domestic reforms gaining traction, analysts suggest that the Nigerian capital market is poised for continued resilience in the face of inflationary pressure.
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