Ruth Ibikunle
The stock market last week closed on a positive note, returning 1.92% week to date. Year to date, the market has returned 0.57% with the All-Share Index and Market Capitalisation at 156,492.36 points and N99.938 trillion respectively.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
The stock market started the new year on a positive note, closing last week on a bullish note with 1.92% growth, week on week.
The Stock market began 2026 with significant momentum, closing the first week of the year with a 1.92% gain. This rally pushed the market capitalisation toward the historic N100 trillion milestone.
The market is benefiting from a broader “January Effect,” where investors reposition their portfolios for the new year. This sentiment was bolstered by a more stable macroeconomic environment compared to 2025:
Headline inflation has begun to cool, falling toward a projected average of 12.94% for 2026, which has improved real returns for equity investors. The Naira demonstrated resilience in the official window (NFEM) at the start of the year, closing around N1,430/$, which provided confidence for both domestic and foreign portfolio investors.
The Central Bank of Nigeria’s (CBN) ongoing bank recapitalisation exercise remains a primary driver. Investors are heavily targeting Tier-1 and resilient mid-tier banks (like GTCO, Zenith, and UBA) in anticipation of balance sheet strengthening and potential corporate actions (mergers, acquisitions, or rights issues) ahead of the March 2026 deadline.
Anticipation of Corporate Earnings
The market is entering the “earnings season” where companies release their unaudited full-year results for 2025.
Dividend Expectations: Strong performance in the consumer goods and industrial sectors in 2025 has led to high expectations for significant dividend payouts, prompting investors to take positions early to qualify for these returns.
Sector Performance: The Consumer Goods Index was a standout performer, driven by companies like BUA Foods and Guinness Nigeria, as they showed improved pricing power and easing FX losses.
Policy and Fiscal Reforms
The commencement of the Nigeria Tax Act 2025 on January 1, 2026, has created a “test” environment for the market. While there were initial fears regarding the 30% Capital Gains Tax (CGT), the government’s shift in focus from “stabilisation” to “growth” has signalled a more business-friendly environment that aims to stimulate private investment and SME growth.
High-Value Listings
There is growing excitement over the confirmed plan to list the Dangote Petroleum Refinery on the exchange later in 2026. Such a massive listing typically attracts significant liquidity and institutional interest, lifting the overall market sentiment well in advance.
The outlook for the Nigerian stock market (NGX) in the coming week and throughout 2026 is characterised by “cautious optimism.” Following a stellar 2025 where the market returned over 51%, analysts expect 2026 to be a year of consolidation, big-ticket listings, and sector-specific opportunities.
Outlook for the New Week
The momentum from the first week of January is expected to carry over, driven by:
The N100 Trillion Milestone: With market capitalisation ending the first week at approximately N99.9 trillion, there is strong psychological pressure to push the market past the historic N100 trillion mark this week.
Bargain Hunting: Investors are likely to continue taking positions in Tier-1 banks and blue-chip consumer goods ahead of the full-year 2025 earnings season.
Tax Law Adjustments: This week will be the first full trading week under the Nigeria Tax Act 2025. Investors will be watching for the impact of corporate tax cuts (from 30% to 25%) versus the new capital gains tax rules.
Liquidity Flows: The reinvestment of dividends and coupons from matured fixed-income instruments is expected to maintain market liquidity.
Strategic Outlook for the Full Year 2026
The market is shifting from “risk watch” to “recovery watch.” Here are the defining themes for the year:
| Key Driver | Outlook & Impact |
| Banking Recapitalization | The March 31, 2026, deadline is the most critical catalyst. Expect a flurry of activity—mergers, acquisitions, and rights issues—as laggard banks race to meet the new capital requirements. |
| Major Listings | The potential listing of the Dangote Petroleum Refinery and NNPC Ltd could be “game changers.” Analysts project that such listings could eventually drive the market cap toward N262 trillion. |
| Monetary Policy | Interest rates are expected to ease. If the CBN cuts the MPR from its current 27% toward 24% or lower, a massive rotation of funds from fixed income back into equities is likely. |
| GDP & Inflation | The economy is projected to grow by 4.49% (CBN) to 5% (Presidency). Inflation is expected to moderate to an average of 12.94%, which will improve real returns for stockholders. |
Potential Risks to Watch
Oil Price Volatility: Global oil prices are projected to stay around $60–$65 per barrel. If they drop further, it could strain Nigeria’s fiscal balance and weaken the Naira.
Base Effect: After the massive gains of 2025, the market may see more modest, “selective” growth rather than an indiscriminate rally across all stocks.
Debt Servicing: High debt service obligations in the N58.18 trillion 2026 budget could limit government spending on growth-stimulating projects.
Investor Takeaway
For 2026, the era of “buying anything” is likely over. Success will reward selectivity. Experts suggest focusing on:
Banking: High-liquidity Tier-1 banks (GTCO, Zenith, Access, UBA).
Energy: Expected annual earnings growth of up to 66% as reforms in the sector take hold.
Consumer Goods: Companies with strong pricing power that benefit from easing inflation.
What is driving the growth in ABC Trans, Honeywell and Fidson?
The growth in ABC Transport, Honeywell Flour Mills, and Fidson Healthcare is being driven by a mix of stellar 2025 financial recoveries, strategic expansion plans, and sector-wide tailwinds as we enter 2026.
1. ABC Transport (ABCTRANS)
ABC Transport has seen a massive price rally (gaining over 260% in the last year) due to a dramatic financial turnaround.
Profit Turnaround: The company moved from a loss-making position in 2024 to a significant profit in 2025. For the nine months ending September 2025, profit after tax surged by 363% to N585.6 million.
SsdStrategic Diversification: Investors are excited about its shift toward CNG (Compressed Natural Gas) trucks to combat high diesel costs.
Logistics Expansion: The establishment of ABC Cargo Limited as an independent logistics arm has opened new revenue streams in the booming e-commerce and haulage sector.
Asset Growth: Its total assets nearly doubled to N14 billion in 2025, signalling aggressive capacity expansion.
2. Honeywell Flour Mills (HONYFLOUR)
Honeywell is a standout in the consumer goods sector, which was the market’s best-performing sector in 2025.
Corporate Restructuring: Optimism is high following its integration into the Flour Mills of Nigeria (FMN) group. This has improved operational efficiency and “cleaned up” the balance sheet.
Pricing Power: Despite high inflation, Honeywell successfully passed increased production costs to consumers, maintaining margins. It returned to profitability in 2025 with a return on equity (ROE) of 34.9%.
Earnings Growth: The company recorded an average annual earnings growth of 33% over recent years, attracting bargain hunters looking for undervalued stocks in the food sector.
3. Fidson Healthcare (FIDSON)
Fidson’s growth is fueled by a “re-rating” of the healthcare sector and major capital expansion projects.
N21 Billion Rights Issue: Fidson recently launched a major capital raise to pay @down high-interest debt and fund a new phase of expansion. This is expected to significantly reduce finance costs and boost future net profits.
Japanese Partnership: The company signed a strategic MOU with Ohara Pharmaceutical (Japan). This partnership provides Fidson with advanced technical know-how and positions it as a leader in local drug manufacturing and import substitution.
Strong Earnings Surge: For the period ending September 2025, Fidson reported a 132% surge in Profit After Tax (PAT) to N7.97 billion, driven by a 56% increase in revenue.
Sector Outlook: With the government pushing for 70% local medicine production, Fidson is seen as a “sovereignty play” for investors looking to hedge against foreign exchange volatility.
Is First Holdco a good buy at N48.80?
Determining if First Bank Holdings (FBNH) is a “good buy” at N48.80 depends on whether you are looking for short-term gains or long-term value. As of the first week of 2026, the stock has shown significant momentum but also some volatility.
The Bull Case (Why it might be a buy)
Deep Valuation Discount: Despite the recent price surge, FBNH is trading at a Price-to-Book (P/B) ratio of roughly 0.6x and a P/E ratio of ~3.4x. This is significantly lower than its peers like Zenith (P/E ~6x) and the broader sector average. Historically, FBNH has been undervalued due to internal boardroom issues, which now appear to be resolving.
Recapitalisation Progress: The CBN’s March 31, 2026, deadline is a major catalyst. FBNH is currently undergoing a massive capital raise. Successful recapitalisation typically triggers a “re-rating” of the stock, potentially pushing the price higher as institutional confidence returns.
Earnings Strength: The group reported a trailing twelve-month (TTM) Earnings Per Share (EPS) of N14.65, which is very strong. If the bank maintains its current profitability, the current price of N48.80 represents a relatively cheap entry point for its earning power.
Momentum: The stock gained nearly 57% in the final weeks of 2025. In the Nigerian market, such momentum often carries into the new year as part of portfolio rebalancing by institutional funds.
The Bear Case (Risks to consider)
Short-term Overvaluation: Some valuation models suggest the stock became “overvalued” in the short term after its December rally. There is a risk of a price correction as early investors take profits.
Analyst Targets: The consensus analyst price target for 2026 sits around N37.21, which is lower than the current market price of N48.80. This suggests that the market might have run ahead of the fundamental “fair value” in the short term.
Dilution Risk: The ongoing capital raise will increase the number of shares in issue. If earnings don’t grow faster than the new share count, it could lead to “earnings dilution,” which might weigh on the share price later in the year.
Summary Table: FBNH at N48.80
| Metric | Value / Status | Note |
| Current Price | N48.80 | Up ~1.9% in the first week of 2026. |
| 52-Week Range | N23.55 – N55.30 | Currently trading near its all-time high. |
| P/E Ratio | ~3.4x | Very cheap compared to the banking sector average (~6.6x). |
| Dividend Yield | ~1.2% | Relatively low compared to Zenith or GTCO. |
| Sentiment | Bullish | High liquidity and high trading volume. |
Verdict
For Long-Term Investors: It remains a compelling play because its “Book Value” suggests the bank is worth much more than its current price. If you believe in the post-recapitalisation “New First Bank,” N48.80 is a reasonable entry for a 12–24-month horizon.
For Short-Term Traders: Use caution. The stock is currently hitting resistance near its 52-week high of N55.30. You might want to wait for a slight “pullback” toward the N42–N45 range to minimise the risk of buying at a local peak.
How attractive are the following stocks: Access Holdings, Legend Internet and TIP, respectively
As of early 2026, the attractiveness of Access Holdings, Legend Internet, and The Initiates Plc (TIP) varies significantly, ranging from a “value recovery” play in banking to “high-growth” momentum in technology and waste management.
1. Access Holdings (ACCESSCORP): The Value Play
Access Holdings is currently in a “consolidation phase” following years of aggressive expansion across Africa and into Europe.
Attractiveness: High (for Value Investors).
Key Drivers: Analysts have set a price target as high as N42.29, implying over 100% upside from current levels. The stock is considered “undervalued,” trading at a Price-to-Book (P/B) ratio of roughly 0.3x.
Dividends: After a brief pause to satisfy the CBN’s capital hierarchy rules, there is a strong expectation for the resumption of dividends by 2026 following a successful capital raise.
Risk: Near-term earnings may be “muted” as the bank absorbs the costs of its many acquisitions and works toward the March 2026 recapitalisation deadline.
2. Legend Internet (LEGENDINT): The Momentum Play
Listed in April 2025, Legend Internet is a newer, high-growth technology stock that has quickly become a retail favourite.
Attractiveness: Medium (High Risk/High Reward).
Key Drivers: It has been one of the top performers on the NGX in early 2026, gaining 9.8% in a single day recently to reach N5.81. Its appeal lies in the growing demand for software and internet services in Nigeria.
Technical Sentiment: Shareholders are optimistic, as the stock has gained over 16% in the last month.
Risk: It is highly volatile and currently lacks deep historical financial data, making it more of a “speculative” growth play than a stable value investment.
3. The Initiates Plc (TIP): The Growth Play
TIP operates in the waste management and industrial cleaning sector, and its 2025 performance was nothing short of extraordinary.
Attractiveness: High (for Growth Seekers).
Key Drivers: TIP gained over 430% in 2025, making it one of the best-performing stocks on the exchange. This was backed by a 129% surge in revenue (N5.38 billion) for the 9 months ending Sept 2025.
Market Position: It is positioned to dominate Nigeria’s estimated $15 billion waste management market with new waste-to-energy initiatives.
Valuation: Despite the price surge, its P/E ratio remains relatively low (~4.3x) compared to the broader market average (~11x), suggesting it may still have room to run.
What are the possibilities in Fidelity Bank?
Fidelity Bank (FIDELITYBK) is currently one of the most talked-about “possibilities” on the Nigerian Exchange (NGX) as it transitions from a mid-tier player into a Tier-1 powerhouse.
Following its historic performance in 2025—where it was the first bank to launch a public offer under the new CBN rules—here are the key possibilities for investors and customers in 2026:
1. The Race to International Tier-1 Status
Fidelity is no longer just a “national” bank. By securing an international banking license and acquiring Union Bank UK (now FidBank UK), the bank has unlocked:
FX Revenue Streams: It can now facilitate significant cross-border trade between Nigeria and the UK, capturing foreign currency earnings that were previously lost to larger rivals.
Recapitalisation Lead: Fidelity has already raised over N270 billion in the first phase of its capital drive. It is now in the final sprint to hit the N500 billion mark required for international banks by the March 31, 2026, deadline.
2. High Dividend and Capital Appreciation
For investors, the “possibility” lies in the stock’s proven ability to outperform:
Top Total Returns: Fidelity has delivered some of the highest total returns in the banking sector over the last three years (gaining over 100% in value between mid-2024 and late 2025).
Dividend Yield: With an annualised dividend yield often hovering around 10%–11%, it is seen as an “income stock” that also offers “growth” potential.
Price Forecast: Having recently crossed the N1 trillion market cap milestone, many analysts see the current price (around N19.00 – N21.00) as a stepping stone toward a higher valuation once the recapitalisation is fully certified.
3. Digital and SME Expansion
A core part of Fidelity’s strategy is its “Digital Railroads” initiative
SME Dominance: It remains a market leader in SME banking. The “possibility” here is its move into fintech-driven lending, which reduces the cost of serving small businesses and increases interest margins.
Retail Growth: With over 10 million customers, the bank is aggressively pushing its mobile and internet banking products, aiming to move 95% of all transactions to digital channels by the end of 2026.
Fidelity Bank Scorecard (2026 Outlook)
| Factor | Status | Investor Impact |
| Capital Base | Approaching N500bn | High safety and increased lending capacity. |
| Asset Quality | NPL Ratio ~2.2% | Very low risk of “bad loans” compared to peers. |
| Growth Strategy | Brownfield Acquisitions | Rapid expansion into new African markets is likely. |
| Valuation | P/B Ratio > 1.0x | Market signals high confidence in future earnings. |
The Verdict: Is it a “Strong Buy”?
Fidelity is a “Growth-at-a-Reasonable-Price” (GARP) play. While it is no longer the “penny stock” it was three years ago, its shift to an international tier-1 license makes it a formidable competitor to Zenith and GTCO.
What are the stocks to watch?
As the Nigerian stock market enters its second week of 2026, several stocks are showing strong technical and fundamental signals. Based on recent price movements, the ongoing banking recapitalisation, and 2025 earnings expectations, here are the key stocks to watch:
NPF, McNichols, Fidson, Access Bank, Aradel, TIP, VFD and a host of others
Tip for the Week
Keep a close eye on the N100 trillion total market capitalisation mark. If the market crosses this milestone this week, it could trigger a “FOMO” (Fear of Missing Out) rally across blue-chip stocks.