Insurance Stocks Fuel N92bn Rise in Market Capitalisation

The Nigerian Exchange Limited (NGX) closed the week on a bullish note as renewed investor interest in insurance and banking stocks lifted the overall market capitalisation by N92 billion. The positive performance, which followed days of cautious trading, reflected improved investor confidence and optimism surrounding the financial sector’s recovery prospects.

Data from the NGX showed that the market capitalisation increased from N56.372 trillion to N56.464 trillion, representing a 0.16 percent gain. Similarly, the All-Share Index (ASI) advanced by 163.08 points, closing at 99,962.84 points compared to 99,799.76 points previously. Analysts attributed the uptrend to gains in key insurance and banking equities, including Cornerstone Insurance, Consolidated Hallmark Insurance, Custodian Investment, and AIICO Insurance.

Market experts said the rally in the insurance segment was driven by improved earnings reports and renewed investor sentiment following regulatory reforms by the National Insurance Commission (NAICOM). The commission’s focus on recapitalisation and stricter governance measures has boosted expectations of stronger, more profitable insurance firms in the near term. According to a Lagos-based stock analyst, “The insurance sector remains undervalued, but investors are beginning to recognise its potential for consistent returns as regulatory reforms take hold.”

Trading activity also saw a significant improvement, with total traded volume rising to 612.45 million units valued at N7.81 billion, exchanged across 7,520 deals. This compared favourably with the previous session’s 418.33 million units worth N5.22 billion. Financial sector stocks—particularly insurance and banking equities—dominated the market, accounting for more than 60 percent of total trades.

Sectoral performance further underscored the insurance-led rally, with the NGX Insurance Index advancing by 3.9 percent. The banking index followed with a 1.2 percent gain, while the consumer goods index closed flat. The oil and gas and industrial goods indices, however, recorded slight declines due to profit-taking in heavyweights such as Dangote Cement and Seplat Energy. Market breadth remained positive, with 34 gainers against 21 losers, signaling broad-based investor optimism.

Cornerstone Insurance topped the gainers’ chart, appreciating by 9.84 percent to close at N2.12 per share. It was followed by Consolidated Hallmark Insurance, which climbed 8.70 percent to N1.25 per share, while Custodian Investment rose 6.05 percent to close at N10.50 per share. AIICO Insurance, Regency Alliance, and Sovereign Trust Insurance also saw notable gains, reflecting strong interest in the insurance segment.

Conversely, John Holt Plc led the losers, declining by 9.70 percent to N3.26 per share. Eterna Plc followed with an 8.22 percent drop, while Japaul Gold fell by 6.11 percent. Analysts attributed the decline in these stocks to investors locking in profits after previous sessions of significant appreciation.

Experts observed that improved liquidity and increased participation from both retail and institutional investors have strengthened market performance. The Central Bank of Nigeria’s (CBN) recent measures to stabilise the naira and boost interbank liquidity have also contributed to investor confidence. Analysts believe that a stable macroeconomic environment and supportive monetary policies will continue to encourage capital inflows into the equities market.

In the broader context, the market’s resilience reflects investors’ gradual shift from fixed-income securities to equities, driven by the prospect of higher returns. With inflation hovering above 30 percent, equities have become a more attractive hedge against value erosion. “Investors are diversifying into stocks with strong fundamentals, especially in financial services and consumer goods, as they seek real value amid high inflation,” said a portfolio manager at a Lagos investment firm.

Despite the positive momentum, some analysts urged caution, warning that short-term volatility remains possible due to inflationary pressures, high interest rates, and global economic uncertainties. They advised investors to focus on fundamentally strong stocks and adopt medium- to long-term strategies.

The fixed-income market, meanwhile, remained relatively quiet, with yields on treasury bills and bonds holding steady. Investors are awaiting the next Monetary Policy Committee (MPC) meeting, where the CBN is expected to maintain its tightening stance to contain inflation. However, some analysts predict a softer tone to support credit growth and economic recovery.

Foreign portfolio investors are also showing renewed interest in Nigerian equities as the country implements market-driven forex reforms and clears outstanding FX backlogs. This has enhanced liquidity in the foreign exchange market and restored confidence in Nigeria’s investment climate. Analysts believe that continued policy consistency could attract more offshore funds into the equities market.

Local investors, who dominate market participation, have also been instrumental in sustaining trading activity. The rise of digital trading platforms and growing retail investor education have encouraged more Nigerians to participate in stock trading. Insurance and banking stocks, due to their affordability and dividend potential, have become top choices for small investors.

Looking ahead, analysts expect the market to maintain its upward trajectory in the near term, supported by strong corporate earnings and investor optimism about ongoing economic reforms. The recapitalisation efforts in the banking and insurance sectors, coupled with the government’s drive to attract foreign investment, could sustain market growth.

 

In conclusion, the N92 billion gain in market capitalisation underscores renewed investor confidence in Nigeria’s financial markets. The strong showing by insurance stocks demonstrates the sector’s growing relevance and potential as a key driver of capital market performance. With improved policy consistency, corporate transparency, and macroeconomic stability, the Nigerian equities market appears poised for sustained growth in the months ahead.