Declining yields in the fixed-income market spurred increased investor patronage on the equities sector of the Nigerian Exchange Limited (NGX) as market capitalisation rose by N3.5 trillion in one week.
The all-share index (ASI) surged by 4.26 per cent week-on-week, crossing the 126,000-point threshold for the first time to settle at 126,149.59 index points.
Investor sentiment shifted decisively in favour of equities last week, spurred by falling yields in the fixed-income market. The most recent treasury bills auction saw the 1-year stop rate ease to 16.3 per cent, dampening the appeal of government debt instruments.
In response, equities became the more attractive investment avenue, triggering a fresh wave of speculative inflows, commonly referred to as ‘hot money.
The renewed interest was visible in technical indicators, with the Money Flow Index (MFI) ticking into bullish territory, signalling stronger market participation and improved liquidity across the bourse. The development underscores a growing risk appetite among investors seeking higher returns amid shifting yield dynamics.
Last week’s rally was primarily driven by heightened interest in banking, insurance, and consumer goods stocks sectors currently basking in strong earnings sentiment ahead of the second quarter reporting season.
Overall market capitalisation climbed by 4.54 per cent to settle at N79.80 trillion, delivering an N3.46 trillion boost to equity investors. Year-to-date, the NGX has now returned an impressive 22.56 per cent, underlining growing confidence in the market’s fundamentals and trajectory.
The rally was not only strong but also broad-based. Market breadth was overwhelmingly positive, with 89 stocks posting gains against only 16 decliners, a robust breadth ratio of 5.56x.
Driving this momentum were stocks in the banking, insurance, and consumer goods sectors, buoyed by optimistic sentiment ahead of the upcoming second-quarter earnings season.
Sectoral indices painted a clear picture of bullish dominance. The NGX Insurance Index surged by 13.83 per cent, while the NGX Banking Index followed closely with a 12.49 per cent gain.
Leading contributors included heavyweights such as Zenith, UBA, FBNH (FirstHoldco), AIICO, UNIVINSURE and GTCO. GTCO enjoyed a strong rally bolstered by its landmark dual listing on the London Stock Exchange, the first by any Nigerian bank, further boosting investor sentiment.
Other sectors joined the uptrend, with the NGX Industrial Goods Index rising by 2.94 per cent and the Consumer Goods Index up by 2.18 per cent. The NGX Commodity Index also edged higher by 0.31 per cent, supported by renewed interest in names like FTNCocoa, C&I Leasng, Union Dicon, MCNICHOLS, Multiverse, WAPCO, NB, and Okomu Oil.
However, the NGX Oil and Gas Index declined, following profit-taking in Oando and Eterna. Looking ahead, analysts at Cowry Asset Management Limited anticipated that the market may adopt a more cautious and mixed tone in the coming week.
According to the firm, the equities market is gradually approaching overbought territory, raising the likelihood of profit-taking and strategic portfolio rebalancing by investors.
They noted that this potential shift in sentiment could be further influenced by the upcoming inflation figures from the National Bureau of Statistics (NBS), as well as heightened anticipation around the Central Bank of Nigeria’s (CBN) Monetary Policy Committee meeting scheduled for July 20–21.