Ruth Ibikunle
The stock market last week closed on a positive note with 4.26% growth. Year to date the market has returned 22.56% with the All Share Index and the Market Capitalisation at 126,149.59 points and N79.803 trillion respectively.
In a stock market review with Gilbert Ayoola, a seasoned capital market analyst, the following were discussed:
Excerpts:
The stock market last week closed on a positive note with 4.26% growth. What is the outlook for the week?
The Nigerian Exchange (NGX) wrapped up last week on a bullish note, driven by renewed investor confidence in fundamentally strong stocks. The 4.26% weekly gain on the All-Share Index reflects positive sentiment ahead of Q2 earnings season and continued macroeconomic stability.
Looking ahead, the market is expected to maintain its upward momentum—though at a more measured pace. Investors are likely to engage in profit-taking, particularly on recently appreciated stocks, introducing short-term volatility. Nonetheless, sectors such as banking, consumer goods, and industrials remain in focus due to solid fundamentals.
Overall, the market is expected to trade mixed with a bullish bias, as market participants continue to position ahead of earnings releases.
•How sustainable is the current rally on NGX Group Plc?
In the short term, yes. The NGX is currently trading near its 52-week high of N72.60, with the index at N71.85 well above the 50-day moving average of N40.75. This premium highlights the strength of current bullish momentum.
However, the sharp deviation from the moving average also suggests the market is overbought, raising the risk of near-term corrections or profit-taking. Sustained earnings growth and macroeconomic stability will be key to maintaining the rally.
•What is driving the growth in FTN Cocoa, Redstar Express, OMATEK, C&I Leasing?
Following impressive market outlook in these mid- and small-cap stocks posting significant gains, driven by sector-specific positive sentiment and strategic positioning.
FTN COCOA — FTN Cocoa has benefited from surging global cocoa prices and export demand, boosted by weaker naira and foreign investment inflows. Strategic capital injections have also strengthened its production capacity and investor sentiment.
RED STAR — Red Star Express is riding on the wave of logistics expansion, with strong earnings growth supported by investments in cold-chain infrastructure and e-commerce delivery. Its improved margins and consistent profitability have drawn investor interest.
OMATEK — Omatek is gaining renewed attention as local demand for indigenous tech manufacturing grows. Market optimism stems from its potential to re-enter Nigeria’s PC and hardware market amid increasing calls for local content.
C&I LEASING — C&I Leasing continues to leverage its diversified business model across fleet management, outsourcing, and marine logistics. Rising infrastructure needs and consistent revenue streams are reinforcing its upward momentum.
•How attractive is GTCO, ZENITH, and UBA at their current prices?
The current attractive pricing of GTCO, Zenith, and UBA reflects strong investor confidence ahead of H1 earnings releases. These Tier-1 banks are currently well-positioned for investor interest, especially ahead of their H1 robust earnings growth and resilient balance sheets.
GTCO — The bank stands out for its impressive strong core income growth, high dividend yield, and a solid capital position in line with earnings momentum, which continue to attract yield-focused investors. Coupled with recent dual listing on the London Stock Exchange and Nigerian Exchange, which has enhanced its valuation profile. The bank’s return on equity (ROE) trajectory and expected interim dividend further support its investment appeal.
ZENITH — The ability to maintain consistent earnings performance and healthy margins with price reflecting optimism around a generous interim dividend. Added with strong liquidity and capital adequacy ratios underpin investor appetite, supported by attractive forward catching potential and recently concluded capital raise on the Nigerian Exchange, all adding up towards investor’s rekindled position.
UBA — stands out with leverages, its pan-African expansion diversification, with opening sets of international branch offices in Saudi Arabia, France, and U.S helping to cushion FX volatility. Its solid earnings outlook and undervalued price-to-book ratio offer both income and capital appreciation potential.
These three banks offer a compelling mix of strong fundamentals, solid H1 earnings prospects, and attractive valuations make them attractive core holdings for medium- to long-term investors.
• How attractive is Oando Plc at N51.70
At N51.70, Oando trades slightly below its 50-day moving average of N53.29, presenting a modest entry point for value-seeking investors. The company’s outlook is largely tied to progress on its debt restructuring efforts, which are aimed at strengthening its balance sheet and improving future earnings visibility.
While investor sentiment remains cautious due to historical volatility and legacy debt concerns, rising global oil prices and a potential operational turnaround could support a gradual re-rating. Oando is considered a cautiously attractive buy for risk-tolerant investors, keeping an eye on restructuring milestones.
Is Legend Internet a good buy at N7
Since its debut on the NGX in April 2025 at N5.64, Legend Internet has delivered strong price action, hitting a high of N10.00 before settling at N7.00. This level may offer an attractive entry into Nigeria’s expanding broadband and digital services market.
Strong Q1 earnings, subscriber growth, and strategic partnerships continue to support its momentum. However, as a relatively new listing, the stock carries a degree of volatility and limited historical data, making it best suited for investors with a medium-to-high risk appetite.
•What are the stocks to watch?
In the wave of market optimism amid Q2 earnings momentum, sector rotation, and macro drivers, here are the list of stocks to watch for the week in view of the bullish run include:
GTCO, MTNN, Berger Paints, Zenith, Ikeja Hotels, Cadbury, Lafarge Wapco, NGXGROUP, Honeywell, UBA, Vitafoam, NSLTECH, ETI, FTNCOCOA, and many others.