- Investors to remain cautious due to lingering volatility and potential profit-taking
Ruth Ibikunle
The Nigerian stock market last week closed on a bearish note, shedding 1.68% week on week. Year to date, the market has returned 42.83% with the All-Share Index and Market Capitalisation at 147,013.59 points and N93.501 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 last week closed on a negative note, as the All-Share Index declined by 1.68%, week on week. What is the outlook for the new week?
The decline in the ASI last week was a part of a market correction and increased volatility on the Exchange that occurred earlier in the month.
The market witnessed strong selling pressure at the beginning of the week against the backdrop of Trump’s pronouncement of military action against part of Nigeria, where is believed insurgents hold sway.
This was also supported by the fear of the impending implementation of the CGT come January 2026
The ASI lost 5.01% on Tuesday, November 11, 2026. The market circuit breaker could not be triggered to activate because the loss happened way after 1.00 pm on that day
The outlook for the new week starting Monday, November 17, 2025, is generally cautiously optimistic, as there is potential for a recovery driven by bargain hunting.
This psychology is hinged on the following premises:
Bargain Hunting:
The previous week’s decline has created attractive entry points for investors to buy fundamentally sound stocks at lower prices. This “bargain-hunting” activity, particularly in large and mid-cap stocks (including major banks – FUGAZ stocks), is expected to drive price appreciation.
Clarification on Fiscal Policy:
Earlier market anxiety related to potential Capital Gains Tax (CGT) reforms seems to have moderated after some clarity was provided. This clarification is helping to restore investor confidence and remove one source of uncertainty that had triggered sell-offs.
Technical Indicators: Some analysis suggests that the market dip found support at key technical levels, which could indicate a temporary pause in the downtrend and the potential for a rebound toward previous resistance levels (around the 150,000 mark).
Intermittent Sell-Offs: Despite the positive technical outlook, some analysts still anticipate intermittent fund outflows from stocks that have recorded substantial gains. This trend can increase overall market volatility.
Liquidity and Stability: Sustaining the bullish momentum will depend on improved market liquidity and a more consistent feeling of stability, which may be challenging in the near term.
Conclusively, following the sharp correction that led to the 1.68% weekly decline, the market is showing signs of a rebound driven by value-seeking investors. However, caution remains due to lingering volatility and potential profit-taking.
Given the mixed signals, analysts suggest investors remain selective, focusing on fundamentally strong stocks that have been beaten down during the correction. New entries are better positioned by buying dips rather than chasing highs immediately.
How would the new T+2 Settlement Cycle impact the market?
The transition of the Nigerian Exchange to a T+2 settlement cycle for equities transactions, effective November 28, 2025, is a significant and positive reform. It reduces the time it takes for a trade to be fully completed (settled) from three business days (T+3) to just two business days (T+2).
This move is designed to modernize the Nigerian capital market, align it with global best practices (T+2 is standard in many major global markets, and some are even moving to T+1), and ultimately enhance its efficiency and appeal.
Key Positive Impacts (Benefits)
1. Enhanced Market Liquidity
Faster Access to Funds:
Sellers will receive their cash proceeds one day sooner, and buyers will get ownership of their securities one day faster. This quick return of capital allows investors to reinvest more swiftly, potentially leading to higher trading volumes and a more liquid market overall.
2. Reduced Risk
Lower Counterparty Risk:
The shorter the time between the trade execution (T) and the final settlement (S), the lower the risk of a counterparty (buyer or seller) defaulting on their obligation due to market fluctuations or other reasons. By shortening the exposure window, the market becomes more stable and resilient.
3. Increased Competitiveness and Foreign Investment
Global Alignment:
Moving to T+2 meets a key requirement for international financial institutions and indices. This alignment makes the Nigerian market more attractive to Foreign Portfolio Investors (FPIs), who often avoid markets with slower settlement times, thereby increasing foreign capital inflow.
Boosted Investor Confidence: A more efficient and secure settlement system is a hallmark of a mature market, which enhances the confidence of both domestic and foreign investors.
4. Improved Capital Management
Quicker Reinvestment: For institutional investors (like pension funds and asset managers), faster access to cash improves their ability to manage their funds efficiently and take advantage of new investment opportunities immediately.
Potential Challenges and Adjustments
1. Operational and Technology Upgrades
Broker Readiness: All market participants, especially brokers, dealers, and custodians, must ensure their back-office operations and technology systems are fully capable of processing and settling transactions within the compressed two-day timeframe. This requires investment and diligence to avoid settlement failures.
2. Shorter Window for Correction
Less Time for Errors: Market operators now have one day less to identify and correct any trade errors or mismatches. This demands greater discipline and automation in post-trade processes, making timely confirmation/affirmation of trades critical.
3. Investor Learning Curve
Understanding the New Timeline: Retail and institutional investors need to adjust their internal cash and asset management timelines to account for the faster settlement, particularly for margin trades and fund transfers.
In summary, the transition to T+2 is a necessary and beneficial infrastructural upgrade that is expected to significantly improve the efficiency, stability, and global standing of the Nigerian capital market.
Why is Dangote Cement trending down?
The recent downward trend in Dangote Cement PLC on the Nigerian Exchange is primarily a result of a sharp market correction and profit-taking after the stock had experienced significant, sustained growth earlier in the year.
As the largest company by market capitalization on the NGX, DANGCEM acts as a bellwether stock, and its movements has a massive impact on the overall All-Share Index (ASI).
Before the recent correction, DANGCEM was one of the market’s star performers, contributing heavily to the ASI’s rally. Investors who had enjoyed substantial gains over the year are now “locking in” their profits by selling their shares.
Liquidity-Driven Sell-Offs: The stock’s large-cap status means institutional investors and foreign portfolio investors hold significant volumes. When they decide to sell to rebalance their portfolios or liquidate funds, the sheer size of the trades causes large, sudden price drops, often hitting the daily 10% circuit breaker (as seen earlier in the week).
Flight to Safety: In periods of overall market uncertainty (like the one triggered by the sharp decline in the ASI), investors tend to liquidate riskier or highly volatile holdings, even blue-chip stocks, contributing to the selling pressure.
Volume Weakness: While the company’s revenue and profit figures remain impressive, supported by higher cement prices in Nigeria, the actual sales volume has been somewhat weak. For instance, Nigerian volumes have been relatively flat, and Pan-African volumes have seen a decline due to issues like currency translation losses and operational constraints in some African countries. This weakness in volume growth can temper investor enthusiasm.
Cost Pressures: Despite improved margins from cost-saving measures (like the use of alternative fuels and CNG trucks), the company still faces persistent cost inflation and currency volatility, which can lead to higher finance costs and operational expenses.
Post-Earnings Reaction: While Dangote Cement’s Q3 2025 results were strong (with a massive surge in Profit After Tax), the stock experienced a sharp drop immediately following the release. This is a classic “sell the news” scenario, where investors who bought in anticipation of the good results decide to sell once the announcement is made public.
Technical Breakdown: The aggressive selling pushed the stock below key support levels on the trading chart, which often signals to technically-driven traders and funds that the short-term trend has turned bearish, prompting further selling.
Despite the recent price drop, most analysts maintain a positive long-term outlook on the stock due to its fundamental strength:
Strong Financials: The company continues to deliver record revenues and profits (Q3 2025 PAT was up significantly year-on-year).
Analyst Targets: Several investment analysts have target prices for Dangote Cement significantly above its current trading price (some forecasts are around NGN 621.79 to NGN 650.23 within the next year).
Bargain Hunting: The stock’s decline creates an opportunity for value-seeking investors to enter at a discounted price, which should help stabilize the stock and lead to a rebound in the coming weeks.
The downward trend is likely a temporary correction phase rather than a reflection of fundamental weakness in the business.
What is driving the growth in the following stocks: Champion Breweries, Cornerstone Insurance, Japaul Gold, Nem Insurance, Oando, and Tantalizer?
The growth in these specific stocks is generally driven by a combination of transformative corporate actions and the overall bullish sentiment (or recent rebound) in the Nigerian Exchange (NGX), especially in the Insurance and Oil & Gas sectors.
1. Champion Breweries Plc (CHAMPION)
The primary driver is a massive, transformative corporate event.
Acquisition of “Bullet” Brand: Champion Breweries acquired Bullet, a leading ready-to-drink alcoholic brand. This acquisition is expected to contribute over 70% of Champion’s total revenue and significantly expand the company’s foreign currency earnings across 14 African markets.
Strong Financial Projections: Following the acquisition, the company has projected more than a five-fold increase in revenue and over ten times growth in profit after tax (PAT).
Capital Raise: The company is undergoing a large N58 billion capital raise (public offer and rights issue) to fund the acquisition, working capital, and expansion plans, signaling a strong commitment to growth.
2. Cornerstone Insurance Plc (CORNERST) & NEM Insurance Plc (NEM)
The growth in these insurance stocks is being driven by sector-wide tailwinds combined with impressive financial results.
Exceptional Sector Performance: The Nigerian Insurance sector has seen a massive surge (up over 100% year-to-date in some periods) as investors buy into companies that have strengthened their balance sheets and risk management processes.
Strong Earnings Growth: NEM in particular has shown significant growth in profitability, with a surge in Group Profit Before Tax (PBT) (up 78% year-on-year in recent data), driven by strong contributions across fire, oil & gas, and marine segments.
Asset and Equity Growth: Both companies are demonstrating growth in total assets and shareholders’ equity, suggesting improved solvency and better deployment of capital, which raises investor confidence.
Valuation Play: The insurance sector is often seen as undervalued compared to the Banking sector, making these stocks attractive value propositions for investors seeking high-growth potential.
3. Oando Plc (OANDO)
Oando’s rally is fundamentally driven by a significant turnaround in profitability and strategic expansion.
Massive Profit Surge: The company has reported a phenomenal increase in profit, with a 164% surge in profit for a recent nine-month period, which was driven by stronger production volumes and operational efficiency.
Strategic Expansion: Oando secured the operatorship of a block in Angola, marking a strategic entry into the Kwanza Basin to expand its upstream footprint in Africa.
Revenue Growth: The company has consistently reported substantial revenue growth (e.g., a 63% production growth in a recent half-year period), demonstrating strong operational performance in the energy sector.
4. Japaul Gold and Ventures Plc (JAPAULGOLD)
This growth is largely driven by a corporate transition and high-volume speculative trading.
Shift to Mining: The company successfully transitioned its focus from oil and maritime services to gold mining and exploration, changing its name to Japaul Gold and Ventures Plc. Investors are buying into the narrative of a shift to the “new oil” (solid minerals).
Strategic Capital: Japaul Gold secured a significant capital commitment from Global Emerging Markets (GEM) and is planning a capital raise to fund the construction of a gold refinery, which signals serious execution of its mining strategy.
High Liquidity and Speculation: Japaul Gold is frequently the most traded stock by volume on the NGX, indicating high retail and speculative interest as traders bet on the success of its new gold venture.
5. Tantalizer Plc (TANTALIZER)
The growth here is driven by new management and a major diversification strategy.
Transformational Strategy: New management has taken a major stake and is repositioning Tantalizers from being just a Quick Service Restaurant (QSR) into a diversified, multi-sectoral conglomerate.
Diversification into the “Blue Economy”: The company announced plans to expand into fisheries and aquaculture (the “Blue Economy”), which is seen as a high-growth sector.
Aggressive Revenue Target: The new management has set a bold revenue target of N18 billion for the end of 2025 (a massive leap from previous figures), which has sparked investor excitement about the company’s potential turnaround and profitability.
How attractive are banking stocks?
Nigerian banking stocks are currently seen as highly attractive by analysts, offering a compelling mix of strong profitability, value, and transformative sector policy tailwinds.
Despite the recent broad market correction (including the slight pullback in the banking sector), the fundamentals and macro drivers for Nigerian banks remain very strong.
Here is a breakdown of the key factors driving the attractiveness of the banking sector:
Surge in Interest Income: The high-interest rate environment sustained by the Central Bank of Nigeria (CBN) has led to a massive increase in Interest Income and Net Interest Margin for banks. This is the single biggest driver of current profits.
Nine major banks recorded a collective surge in interest income in the first nine months of 2025 (Q3 2025) compared to the previous year.
Strong Bottom Line: As a direct result of increased interest income and prudent cost management, banks have reported phenomenal growth in Profit After Tax (PAT) for Q3 2025.Tier 2 banks like Wema Bank and Sterling Financial Holdings, in particular, have shown triple-digit PAT growth.
2. Recapitalization Mandate: A Sector Transformation
The CBN’s directive for banks to significantly increase their minimum capital requirements is a major, ongoing catalyst for investor interest.
Investor Confidence: The successful raising of fresh capital by multiple banks (totaling over N2 trillion raised in H1 2025) reinforces investor confidence in the future stability and capacity of the Nigerian banking system.
M&A Potential: The mandate is expected to lead to mergers and acquisitions (M&A) among smaller banks that may struggle to meet the requirements, potentially creating larger, stronger institutions. This M&A speculation drives trading interest.
3. Valuation and Dividend Appeal
Attractive Valuations: Despite the rally seen earlier in the year, many Nigerian bank stocks still trade at low Price-to-Earnings (P/E) ratios and have high Earnings Yields when compared to their actual earnings performance.Analysts often highlight this sector as being undervalued on a relative basis.
For example, based on Q3 2025 results, some banks have P/E ratios well below 4x, indicating they are generating high earnings relative to their share price.
Dividend Potential: Nigerian banks are historically known for paying regular dividends. Their massive earnings growth sets the stage for potentially higher dividend payouts at the end of the 2025 financial year, attracting income-seeking investors.
4. Market Performance and Stability
Sector Leadership: The NGX Banking Index has been one of the top-performing sectors for most of 2025 (e.g., gaining over 25% in July 2025 alone), driven by the FUGAZ stocks (FirstBank, UBA, GTCO, Access, Zenith).
Institutional Support: Banking stocks are heavily favored by domestic institutional investors, particularly pension funds, who provide stable, long-term demand and help cushion against temporary market volatility.
Current Outlook for Banking Stocks
The outlook for the banking sector for the rest of Q4 2025 and into 2026 remains Bullish.
What are the stocks to watch?
This is a crucial week for the Nigerian Exchange (NGX) as the market is expected to solidify the rebound that started late last week following a significant correction. The focus will be on stocks with strong fundamentals that saw the deepest price cuts, as well as those with major corporate events.
Here are the key stocks and sectors to watch for the week starting Monday, November 17, 2025:
1. The Banking Sector (FUGAZ Stocks) – The Bargain Hunters’ Focus
The entire banking sector is a primary watch list. These stocks led the market drop and are now the main target for bargain hunting.
Zenith Bank
One of the most profitable banks that saw significant price decline last week. Watch for a strong rebound driven by large institutional investors buying the dip.
GTCO
Similarly, a high-quality name was heavily sold off. Its strong performance metrics and dividend appeal makes it an immediate recovery candidate.
Access Holdings
High trading volume indicates high liquidity. Watch for major accumulation after it experienced one of the sharpest declines in the sector.
FCMB Group
Closed higher last week (+0.50) and has been active by volume. Continues to be one of the most liquid Tier 2 banking stocks with strong earnings growth.
Dangote Cement
Has been highly volatile but stabilized towards the end of last week. A sustained upward move here is necessary to pull the entire ASI out of the correctional phase.
BUA Cement
Closed positively on the last trading day (+6.00). Watch for continued momentum as investors may shift focus from the more battered DANGCEM.
Presco Plc
The company announced a Rights Issue notification on November 12, 2025. Trading patterns will be dominated by investors positioning for, or reacting to, the terms of the capital raise.
Champion Breweries
Continuing to watch for reaction to its transformative Bullet brand acquisition and large planned capital raise, which are set to redefine its financial profile.
The Initiates Plc
Closed as one of the top gainers last week (+8.81%). Watch for short-term momentum to continue, possibly fueled by recent strong corporate results (Q1 PAT up 385% YoY).
Japaul Gold
High volume speculative play driven by the shift into gold mining and exploration. Will continue to be highly active based on market rumors and retail interest.
Guinness Nigeria
Closed positively on the last trading day (+4.00). Watch for sustained buying interest in the Consumer Goods sector, potentially reacting to improving financial figures.
The overall tone for the week is expected to be a rebound, but it will likely be fragile and marked by intermittent profit-taking. Investors and new market entrants are advised to focus on the fundamentally sound large-cap stocks for stability, and the high-momentum stocks for potential explosive gains.