Ruth Ibikunle
The Nigerian stock market last week closed on a negative note, declining by 0.77%, week on week. Year to date, the stock market has returned 40.52% with the All Share Index and Market Capitalisation at 144,628.20 points and N91.502 trillion.
In a stock market review with Mr. Gilbert Ayoola, a seasoned capital market expert, the following were discussed:
Excerpts:
• The stock market last week closed on a negative note with a decline of 0.77%. What is responsible for the pullback?
The Nigerian stock market last week closed down by 0.77%, reflecting a cautious investors’ stance. The decline was primarily driven by profit-taking in key stocks after to several weeks of rally, coupled with weak corporate earnings releases and lingering macroeconomic indicators, including inflationary pressure and naira volatility. Uncertainty around CBN’s monetary policy direction also dampened sentiment. Investors are advised to adopt a selective approach, focusing on fundamentally strong stocks with resilient earnings and defensive potential.
• What is the outlook for the new week?
We expect to see mixed trading performance in the new week, driven by bargain hunting in undervalued stocks and ongoing concerns over inflation, FX volatility concerns, and interest rate direction. Market sentiment may likely be shaped by upcoming corporate earnings and macroeconomic data.Overall activity might stay low as investors are cautious, preferring to focus on value-driven opportunities.
• What is driving the growth in Mutual Benefit Assurance, Tripple G, Sunu Assurance, Mecure, and Deap Capital?
Renewed investor interest is driving strong momentum in Mutual Benefits Assurance, Triple G, Sunu Assurance, Mecure, and Deap Capital. This growth is largely fueled by bargain hunting in low-priced stocks, improved market liquidity, and speculative positioning as investors seek quick gains ahead of potential corporate announcements and policy shifts.
Mutual Benefits Assurance – Mutual Benefits surged in view of investors’ demand, driven by renewed confidence in the insurance sector. Expectations in regulatory reforms and recapitalisation, aligned with the company’s improved capital are boosting sentiment. The stock’s current price of N4.26 reflects strong momentum, trading well above its 52-week low of N0.67 and its 50-day moving average of N1.67, positioning it as a top gainer among undervalued equities.
Triple Gee– The stock is gaining traction on renewed investors’ interest, fueled by positive sentiment around rising demand for packaging and printing solutions. The company’s Q1 2025 earnings show signs of recovery, contrasting its loss performance in 2024 and signaling a potential turnaround. This has sparked fresh buying and stock repricing, with investors taking positions at the current level that is well above its 52-week low of N1.70, anticipating sustained growth momentum.
Sunu Assurance – The stock is attracting strong investors’ interest on expectations of sector consolidation, with the company viewed as a likely beneficiary of upcoming capital restructuring in the insurance sector. This sentiment is reinforced by its Q2 2025 financials, showing retained earnings growth, improved total equity, and a significant rise in contingent reserves, all supported by positive revenue. These fundamentals are driving renewed confidence and upward momentum in the stock.
Mecure – Investors’ interest in Mecure Industries remains strong, driven by rising demand for pharmaceutical products and the company’s strategic expansion plans. The positive sentiment is further supported by its Q2 2025 financials, which show solid growth across both revenue and profit margins and are being factored into the stock’s current pricing, reinforcing an upward trajectory as investors position for sustained performance in the healthcare sector.
Deap Capital – The recent price movement is driven by speculative buying, as investors bet on a potential turnaround following ongoing corporate restructuring efforts. Despite this optimism, the company’s Q1 and Q2 2025 results showed continued year-on-year losses, highlighting that the rally is sentiment-driven rather than fundamentals-based. For now, the stock remains a high-risk play, appealing to short-term trade anticipation pending clearer signs of financial recovery.
• Is Champion Breweries a good buy at N16.95?
Yes, the stock is gaining traction, trading at N16.95, just below its 52-week high of N17.80, and well above its 50-day moving average of N11.92. The price surge is driven by strong investor interest, improved operations, and positive outlook in the consumer goods sector. With sustained momentum and room for further upside, Champion Breweries presents a compelling “BUY” opportunity for investors seeking short-to medium-term gains.
• Why is UPDC trending down?
UPDC is trending down amid broader market decline and sustained profit-taking. The stock’s slide is further compounded by weak fundamentals, sluggish earnings, high operating costs, and limited progress in asset repositioning. In a market environment where investors are locking in gains and shifting to stronger plays, UPDC’s lack of near-term catalysts has made it vulnerable to sell pressure, keeping sentiment negative.
• How attractive is Ellah Lakes at N14.88?
Ellah Lakes’ 9-month 2025 results show moderate alignment with market expectations, reflecting steady revenue growth and ongoing operational restructuring. However, profitability remains under pressure due to high input costs and limited scale. At N14.88, the stock appears pricey relative to current fundamentals, with limited upside unless stronger earnings momentum emerges. Investors should watch for improved margins and execution before considering fresh entry. Hold with a cautious outlook.
• Nigeria’s inflation rate dropped to 21.8% in the month of July 2025. What will be the impact on the stock market?
Nigeria’s inflation rate eased to 21.8% in July 2025, offering a positive signal for the stock market. The decline will possibly ease pressure on the Central Bank’s monetary policy, improved liquidity, and investor confidence. Lower inflation enhances real returns and supports consumer purchasing power, potentially boosting corporate earnings. This effect triggers renewed buying interest, especially in consumer goods, banking, and industrial stocks. Overall, the drop in inflation is a welcome development that supports a mild market rebound in the near term.
• What are the stocks to watch?
As investors position into the new week, focus remains on stocks with strong price momentum aligned with market expectations. Stocks to watch include Champion Breweries, Mutual Benefits Assurance, Ecobank, Mecure, AllCO, Fidelity, UBA, Dangote Sugar, Presco, Transcorp, MTN, Zenith, Nestle, BUA Cement, Access, and many others.