The Nigerian Exchange Limited (NGX) extended its bullish run on Thursday as the All-Share Index (ASI) crossed the 130,000-point threshold, driven by increased capital rotation from fixed income instruments into equities.
The ASI rose by 1.02 percent to close at 130,283.86 points from the previous day’s 128,967.08 points to set a new all-time high for the local bourse.
Equities market capitalisation also rose from N81.584 trillion on Wednesday to N82.417 trillion on continued investor interest in the Nigerian stock market.
The market has now posted a year-to-date return of 26.58 percent, supported by strong performance in consumer goods, banking, and insurance stocks.
The sharp decline in treasury bills (T-bills) yields and moderating inflation have made equities more attractive relative to fixed income instruments.
Yields on short-term government securities have compressed in recent weeks, prompting investors to rebalance portfolios in favour of dividend-paying stocks.
The shift is further supported by expectations of interim dividend declarations as companies begin releasing half-year 2025 financial results.
According to analysts, the recently published June inflation figure of 22.22 percent — down from 22.97 percent in May — suggests room for possible monetary policy easing in the coming months.
Vetiva Research stated that the bond market outlook remains positive, with potential for further yield compression at the mid-to-long end of the curve, although system liquidity may keep short-term demand subdued.
Comercio Partners, in a separate note, cautioned that despite the easing headline inflation, food inflation remains a concern and must be closely monitored.
The Central Bank of Nigeria’s Monetary Policy Committee (MPC) is scheduled to meet on July 21 and 22 for its 301st session, with markets watching closely for any policy shift.
Analysts widely expect the MPC to maintain the current policy rate while possibly adjusting the asymmetric corridor to stimulate domestic demand and support economic activity.
Maintaining the current rate, they argue, is essential to preserve foreign portfolio inflows and avoid renewed pressure on the naira.
The recent rebound in the naira, now nearing its January 2025 opening level, has improved investor sentiment and strengthened the case for continued equity exposure.
Nigeria’s upgraded credit ratings from two major agencies have also helped lower the risk premium and attract moderate-risk investors.
Futureview Research said it maintains a cautiously optimistic outlook for the equities market, with expectations of continued positive momentum barring any significant macroeconomic shocks.
CardinalStone Research added that it anticipates a cumulative policy rate cut of 50 to 100 basis points in the second half of 2025, driven by inflation moderation and foreign exchange stability.
The market’s performance reflects broad-based investor participation and growing confidence in the strength of Nigeria’s listed corporates and improving macroeconomic fundamentals.
