Key points
- Investors gained ₦11.109 trillion in July as the NGX rebounded from June’s losses.
- Banking stocks led the rally on strong earnings expectations, recapitalisation and institutional buying.
- Market capitalisation rose 7.55 per cent to ₦158.326 trillion.
Main story
The Nigerian equities market staged a strong recovery in July, with investors gaining ₦11.109 trillion as renewed demand for banking stocks reversed the losses recorded in the previous month.
Market capitalisation increased by 7.55 per cent to ₦158.326 trillion at the end of July, from ₦147.217 trillion at the beginning of the month, while the Nigerian Exchange (NGX) All-Share Index advanced 6.92 per cent to close at 245,283.63 points.
The rally was driven primarily by sustained buying interest in banking stocks, particularly First HoldCo Plc, amid expectations of strong half-year corporate earnings, ongoing bank recapitalisation and increased participation by institutional investors.
Trading activity also strengthened during the month, with investors exchanging 17.817 billion shares valued at ₦1.184 trillion in 1,166,154 deals, compared with 16.292 billion shares worth ₦855.994 billion traded in June.
Among the month’s strongest performers were Aradel Holdings, MTN Nigeria, Dangote Cement, HBM Nigeria, Nigerian Aviation Handling Company (NAHCO), Transcorp Hotels, NGX Group, Africa Prudential and Unilever Nigeria.
Banking and insurance stocks recorded notable gains. First HoldCo more than doubled from ₦56.05 to ₦129.55, while United Bank for Africa, Zenith Bank, GTCO, AIICO Insurance and AXA Mansard Insurance also closed higher.
However, Nestlé Nigeria, Presco Plc, Vitafoam Nigeria, Legend Internet, Omatek Ventures and Neimeth International Pharmaceuticals ended the month in negative territory.
The issues
The July rebound reflects renewed investor confidence in the banking sector as lenders approach recapitalisation milestones and prepare to release half-year earnings. Strong corporate results and interim dividend expectations are supporting market sentiment, although macroeconomic uncertainties and regulatory developments remain key risks to sustained gains.
What’s being said
“The market may not witness an aggressive rally, but we expect it to remain positive as more companies release their half-year results.” — Tajudeen Olayinka, Managing Director, Wyoming Capital and Partners.
“Banking stocks were likely to dominate trading activities in August, noting that many were still trading below their intrinsic values despite strong fundamentals.” — Tajudeen Olayinka, Managing Director, Wyoming Capital and Partners.
“Adverse macroeconomic developments and unexpected regulatory actions, particularly in the banking sector, could weaken investor sentiment and slow the market’s positive momentum.” — Tajudeen Olayinka, Managing Director, Wyoming Capital and Partners.
What’s next
Investors will closely monitor the release of half-year corporate earnings and interim dividend announcements, particularly from tier-one banks, to assess whether the market can sustain its positive momentum through August.
Bottom line
July’s recovery highlights renewed confidence in Nigerian equities, with banking stocks driving a sharp rebound as investors position for stronger corporate earnings and continued sector reforms.
