Financial Stocks Drive N1.27tn Rally on NGX

Nigeria’s equities market closed on a strong note as financial stocks spearheaded a N1.27 trillion rally on the Nigerian Exchange (NGX), reflecting renewed investor confidence and improved sentiment toward the banking and insurance sectors. The significant market upswing, analysts say, is largely driven by robust third-quarter earnings, improved liquidity in the foreign exchange market, and expectations of a stable monetary policy outlook.

At the close of trading, the market capitalisation rose to approximately N59.34 trillion from N58.07 trillion in the previous session, representing a 2.19% increase. The NGX All-Share Index (ASI) also advanced by 2.19% to settle at 104,569.87 points, marking one of the most significant daily gains recorded in recent months.

Financial sector stocks—especially those of leading banks—were the major drivers of the rally. Shares of Zenith Bank, Guaranty Trust Holding Company (GTCO), Access Holdings, FBN Holdings, and United Bank for Africa (UBA) recorded strong price appreciations following sustained investor interest. Insurance stocks, including NEM Insurance and AXA Mansard, also contributed to the upward momentum with notable gains.

Market data showed that Zenith Bank led the chart in terms of volume and value traded, followed closely by UBA and GTCO. Analysts attributed the strong performance of these stocks to investors’ optimism over the sector’s resilience despite the challenging macroeconomic environment. The anticipation of higher profit margins resulting from recent monetary policy adjustments by the Central Bank of Nigeria (CBN) has further boosted confidence in banking equities.

Analysts at Cordros Capital noted that the financial sector’s rally was underpinned by improved liquidity conditions and increased participation by both domestic institutional and foreign investors. “The market has responded positively to improved forex market stability and the gradual return of foreign portfolio investors. The banking sector remains the most attractive due to its strong fundamentals and dividend outlook,” the report stated.

The insurance sub-sector also gained traction, supported by renewed interest from retail investors and the gradual adoption of digital insurance platforms, which are enhancing profitability and transparency. The increased awareness of insurance as a financial safety net in uncertain economic times has further improved market participation in that segment.

Meanwhile, analysts believe the positive performance of the NGX reflects a broader trend of recovery in investor confidence following months of volatility triggered by high inflation, naira depreciation, and policy uncertainty. With inflation showing signs of moderation and the CBN’s reforms beginning to yield results, market sentiment appears to be strengthening across key sectors.

In the energy sector, stocks such as Seplat Energy and TotalEnergies also recorded moderate gains, contributing to the overall bullish tone. However, the day’s performance was largely dictated by the banking index, which surged by over 3.8%, marking one of its strongest movements this quarter.

Investors’ enthusiasm has also been boosted by expectations that the forthcoming monetary policy committee (MPC) meeting will maintain a stable interest rate environment, supporting credit expansion and economic recovery. A stable policy stance is expected to encourage more lending activities by banks while maintaining healthy profit margins amid rising yields on fixed-income instruments.

The Chief Executive Officer of the Nigerian Exchange Limited, Temi Popoola, commended the improved participation of institutional investors in the market. He noted that the exchange has continued to attract significant attention from global investors due to the strength of Nigeria’s banking and consumer goods sectors. “The recent surge reflects confidence in the resilience of our capital market. The reforms undertaken to enhance transparency and liquidity are beginning to yield tangible results,” he said.

Market experts, however, cautioned that sustained growth will depend on macroeconomic stability and the continuous implementation of investor-friendly policies. They emphasised the need for the federal government to ensure consistent foreign exchange supply, reduce borrowing costs, and address infrastructural bottlenecks that affect corporate profitability.

According to the Head of Research at United Capital, Mr. Ayodeji Ebo, the rally could extend if listed companies maintain strong earnings performance in the last quarter of 2025. “The Q3 earnings season has shown resilience among financial institutions, and investors are taking strategic positions ahead of year-end dividends. If this momentum continues, the NGX could close the year on a strong note,” he said.

Foreign portfolio investors, who had previously exited the market due to exchange rate instability and repatriation concerns, are also gradually returning as the naira stabilises. Analysts say the CBN’s efforts to clear the forex backlog and improve transparency in currency management have started to restore international investor confidence.

Meanwhile, trading activity remained upbeat as total turnover rose significantly, with over 630 million shares valued at N12.8 billion exchanged in more than 8,700 deals. Market breadth also closed positive, with 42 gainers compared to 18 losers, indicating a broad-based recovery across sectors.

While the strong rally has sparked optimism, experts have urged caution, warning that short-term corrections could occur as investors take profits. Nonetheless, they noted that the medium- to long-term outlook for the Nigerian equities market remains positive, particularly for fundamentally strong financial stocks with consistent dividend records.

 

Overall, the N1.27 trillion rally on the NGX underscores the growing investor appetite for Nigerian equities amid signs of economic stabilisation and strengthening corporate performance. With the financial sector taking the lead, analysts predict that the upward trend could continue if the government maintains fiscal discipline and sustains ongoing reforms aimed at restoring macroeconomic confidence.