Ruth Ibikunle
The Nigerian stock market last week closed on a positive note with 1.63% growth. Year to date, the market has returned 42.86% with the All-Share Index and Market Capitalisation at 147,040.07 points and N93.722 trillion.
In a stock market review with the MD/CEO of GlobalView Capital Limited, Aruna Kebira, the following were discussed:
Excerpts:
The stock market last week closed on a positive note with 1.63% growth. What is the outlook for the new week?
The 1.63% growth was a result of heavy buy-side activity centred on specific high-value stocks (blue chips) and a broad positive market sentiment driven by anticipation of good corporate results and a rotation of funds towards the equity market’s attractive returns.
There was a strong performance in Insurance, Consumer Goods, and Industrial Goods during the period. The massive gains in key stocks, such as MTN Nigeria, Guinness Nigeria, NASCON, and Champion Breweries, significantly contributed to the overall index movement.
Amidst high inflation and rising interest rates in the money market (Treasury Bills, Bonds), the stock market is often viewed as a hedge. After periods of profit-taking or volatility, institutional and retail investors often engage in bargain hunting, buying stocks that they perceive as undervalued relative to their fundamentals or future earnings potential.
When other investment vehicles offer lower real returns (after adjusting for inflation), investors tend to move funds into equities, particularly those large-cap stocks that offer attractive dividend yields.
While the Central Bank of Nigeria (CBN) maintains a tight monetary policy to combat inflation, specific government or regulatory news can instill confidence. Any indication of improved foreign exchange liquidity or an expectation of further stability in the Naira often attracts foreign and local investors, especially into companies with significant dollar-denominated assets or revenue streams (like MTN, DANGCEM, and SEPLAT).
The outlook for the new week on the Nigerian stock exchange is generally cautiously optimistic, though tempered by the potential for profit-taking after the recent rally. The market is still heavily influenced by corporate news and macro policy signals.
The overall sentiment is positive with an upward bias, driven by corporate anticipation. However, the upward movement is likely to be measured and selective as investors balance the lure of strong corporate results against the immediate risk of profit-taking after last week’s rally.
Investors will continue to engage in selective positioning by focusing on stocks with strong fundamentals and attractive valuations. The market is increasingly driven by impressive corporate earnings, particularly in key sectors like Banking, Consumer Goods, and Industrial Goods.
Since we are approaching the end of the year, investors will be positioning themselves for impressive full-year (FY) results and, more critically, the subsequent dividend announcements. This anticipation often creates strong buy-side momentum for blue-chip stocks.
Large-cap stocks that have recently driven the ASI (e.g., MTN, Dangote Cement, and major banks like GTCO and Zenith Bank) will likely remain in focus due to their size, liquidity, and ability to deliver solid earnings despite macroeconomic headwinds.
After a significant weekly gain of 1.63%, some level of profit-taking (selling shares to lock in gains) is anticipated, which could cause a temporary drag on the market’s performance early in the week.
The market remains highly sensitive to policy pronouncements from the Central Bank of Nigeria (CBN). Any perceived improvement in the Foreign Exchange (FX) market stability (attracting foreign inflows) or clarity on the banking sector recapitalisation exercise will provide a significant boost to investor confidence.
While high interest rates in the fixed-income space (like Treasury Bills) can draw money away from equities, the stock market continues to serve as an important hedge against high inflation. Any news regarding the latest inflation figures will be closely monitored.
As a major oil-producing economy, global oil price fluctuations and decisions by OPEC+ will continue to influence investor sentiment, particularly for oil and gas companies and the broader economy.
What is driving the growth in MTN Nigeria, Mecure, Japaul Gold and Guinness?
Here is an analysis of the key factors driving the growth of MTN Nigeria, Mecure Industries, Japaul Gold & Ventures, and Guinness Nigeria:
1. MTN Nigeria Communications Plc (MTNN)
MTN’s growth is driven by its strong fundamentals as a dominant player in the high-growth telecommunications sector.
Data and Digital Revenue Growth: Data remains the primary engine of growth. MTN’s continued investment in its 4G and 5G network expansion is driving increased data traffic and a higher conversion of its large subscriber base to data users. This compensates for any pressures on voice revenue.
FinTech Expansion (MoMo PSB): The expansion of its Payment Service Bank (PSB) services, MoMo, is a major growth driver. Investors are optimistic about the long-term revenue contribution from the financial services sector, leveraging its vast agent network and subscriber base.
Pricing Adjustments: Strategic tariff adjustments and efficient cost management, which recently led to a significant turnaround in its profit (despite initial macro-challenges), reinforce investor confidence in its profitability and operational resilience.
2. Mecure Industries Plc (MECURE)
Mecure’s growth is a combination of strong operational performance and significant post-listing momentum.
Solid Revenue Growth: The company has reported strong revenue growth, driven by product innovation (launching new products) and strategic market expansion into neighbouring West African countries.
Local Manufacturing Advantage: In an environment where the Naira is volatile and Foreign Exchange (FX) for import is scarce, Mecure’s commitment to local manufacturing of pharmaceutical products is highly attractive. Local production insulates the business from severe FX-related cost pressures better than import-dependent rivals.
Post-Listing Momentum: The stock has seen massive appreciation since its listing by introduction, as the public market has unlocked and priced the company’s valuation.
3. Japaul Gold & Ventures Plc (JAPAULGOLD)
Japaul Gold’s growth appears to be primarily driven by speculative interest and its strategic shift, rather than by immediate massive earnings.
The Gold Sector Appeal: The company’s rebranding and shift in focus from maritime services to gold and mining have attracted significant investor interest. In a high-inflation, high-FX-volatility environment, gold is seen as a traditional hedge and a source of potential dollar earnings, which makes the stock highly attractive to speculators.
High Volume Trading: The stock frequently features in the list of most actively traded stocks, indicating high liquidity and retail investor speculation. The stock often experiences significant daily price changes (volatility) based on market sentiment and volume.
Turnaround Potential: Investors are betting on the company’s ability to successfully monetise its gold and mining assets, which represents a potential value unlock.
4. Guinness Nigeria Plc (GUINNESS)
Guinness is a major player in the Consumer Goods and Beverages sector, and its recent growth is tied to its market position and potential corporate actions.
Strong Brand Equity: Guinness owns a wide portfolio of brands in the alcoholic and non-alcoholic segments (Guinness Stout, Malta Guinness, etc.), giving it a dominant market position.
Anticipation of Full-Year (FY) Results: As with many blue-chip stocks, investors are positioning for impressive year-end results and the potential for a high dividend payout. The stock has been consistently performing well in terms of year-to-date and 4-week growth, suggesting sustained institutional buying.
FX Advantage (Potential): Being part of the global Diageo group, any indication of improved access to foreign exchange or stability can be seen as beneficial for the company’s ability to import raw materials and manage its foreign-currency-denominated obligations.
How attractive is PZ at N47.00?
PZ Cussons is attractive from a fundamental valuation standpoint, as its Price-to-Earnings ratio is low, and its financial turnaround is impressive. This suggests there is long-term value in the stock if it continues its profit recovery.
However, from a short-term trading perspective, the stock is showing signs of being overbought and is currently trading above the average analyst price target. The stock appears fundamentally sound, but consider whether N47.00 is a sustainable entry point right now, or if waiting for a technical pullback (dip) might offer a better margin of safety.
At N47.00, the attractiveness of PZ is a complex picture, heavily leaning on strong fundamentals but facing technical overbought conditions and analysts’ immediate price targets.
See below for a balanced analysis of its attractiveness:
Factors Suggesting Attractiveness (The Bull Case)
| Metric / Factor | Value / Detail | Implication |
| P/E Ratio (Trailing) | approx 6.95x | This is significantly lower than the Nigerian market average, approximately 10.6x and its peer average, approximately 9.3x. It suggests the stock is undervalued relative to its recent earnings. |
| Earnings Per Share (EPS) | N6.77 | PZ has successfully swung back to profitability, reversing a major loss from the previous year, which is a massive win for investor confidence and the core driver of the current low P/E ratio. |
| Revenue Growth Forecast | approx. 24.63% per year | Analysts forecast strong top-line growth, indicating that the company’s core business (Home & Personal Care, Appliances) is expected to continue performing well. |
| Price Momentum | approx. +93.4% YTD | The stock has more than doubled year-to-date, showing strong investor confidence and institutional buying interest. It has also significantly outperformed its peers and the broader market. |
| FX Loss Mitigation | Successful FX Loss Reduction | Management has shown the ability to mitigate the severe impact of Naira devaluation (the cause of its prior losses), demonstrating operational resilience. |
Factors Suggesting Caution (The Bear Case)
| Metric / Factor | Value / Detail | Implication |
| Immediate Price Target | Average Analyst Target approx N43.35$ | The current price of N47.00 exceeds the average 12-month analyst price target, suggesting a short-term downside risk of approximately 7.8%. |
| 52-Week Range | N22.00 – N47.10 | The stock is trading at the very top of its 52-week range, near its 52-week high, meaning there is less immediate room for upward movement without a sustained new catalyst. |
| Negative Shareholders’ Equity | High Debt/Equity Ratio approx -1,514% | The company still has a significant negative shareholders’ equity (more liabilities than assets), a legacy of past foreign exchange losses, which represents a fundamental risk. |
Is Nigerian Breweries a good buy at N82.40?
The decision of whether Nigerian Breweries Plc (NB) is a good buy at N82.40 is nuanced. The price reflects a significant market rally driven by a strong financial turnaround, but it is currently at its 52-week high and appears technically expensive.
Here is a breakdown of the factors to consider:
The Bull Case (Why it is a “Good Buy” Long-Term)
| Factor | Detail & Implication |
| Massive Financial Turnaround | NB has successfully bounced back from huge losses (driven by FX devaluation) in 2024 to significant profitability in 2025. The H1 2025 results showed a N88.06 billion net profit, reversing a major loss from the previous year. |
| Strategic Deleveraging | The company used the proceeds from its N600 billion Rights Issue to pay down substantial foreign currency-denominated debt. This move has drastically reduced its finance costs, making the business more financially resilient and leading to a significant drop in net financing costs (down 87% in H1 2025). |
| Strong Revenue Growth | Revenue has been robust, hitting N1.04 trillion in 9M 2025 (a 48% increase year-on-year). This is driven by strategic price increases, strong commercial execution, and premiumisation (selling higher-margin products). |
| Return to Dividends | Analysts expect the company to resume dividend payments in 2025 following the return to profitability and the strengthening of its balance sheet. This is a huge incentive for income-focused investors. |
| Valuation Relative to Peers | The stock’s current Trailing Twelve Months (TTM) Price-to-Earnings (P/E) ratio is around 25x, which, while high, is near the sector average approx 28x). The forward P/E (based on expected future earnings) is much lower, which can signal undervaluation based on prospects. |
The Bear Case (Why you should Exercise Caution Short-Term)
| Factor | Detail & Implication |
| 52-Week High | The price of N82.40 is at the very top of its 52-week range, N27.50 – N82.40. This means the stock has experienced significant appreciation (up over 190% YTD), and a period of profit-taking is highly likely in the short term. |
| Immediate Resistance | Buying at an all-time high offers little immediate support. Any negative news or general market correction could lead to a sharp drop. |
| Macroeconomic Headwinds | Despite the internal turnaround, the company still faces the risk of high inflation and constrained consumer disposable income, which affects volume growth in the mass-market segment. |
Conclusion and Verdict
The attractiveness of Nigerian Breweries at N82.40 depends entirely on your investment horizon:
- For a Long-Term/Fundamental Investor (1-3+ years): The strategic moves (Rights Issue, debt paydown) have fundamentally de-risked and repaired the company’s balance sheet, setting it up for sustained profitability and dividend resumption. If you believe in the long-term growth of the Nigerian consumer market, this price is justifiable.
- For a Short-Term/Momentum Trader (0-6 months): The stock is highly likely to experience a technical correction due to its overbought status and proximity to the 52-week high. You may find a better entry point after a period of consolidation or profit-taking.
Recommendation: If you are interested, consider setting an entry point at a lower price (e.g., waiting for a technical pullback) to mitigate the short-term risk associated with buying at a peak.
What are the stocks to watch?
Dangote Cement, BUA Cement, Transpower, Access Bank, FCMB, TIP, VFD, Ellah Lakes and a host of others.