Ruth Ibikunle
The Nigerian stock market last week closed on a positive note with 0.97% growth. Year to date, the market has returned 49.17% with the All-Share Index and Market Capitalisation at 153,539.83 points and N97.89 trillion respectively.
In a stock market review with Mr Gilbert Ayoola, a seasoned capital market analyst, the following were discussed:
The stock market last week closed on a positive note with 0.97% growth. What is the outlook for the new week?
The Nigerian stock market closed last week on a positive note, delivering a classic Santa Claus rally as the All-Share index advanced by 0.97%. The uptick reflected renewed bargain hunting and portfolio rebalancing typical of the year-end period, with investors selectively positioning ahead of the new trading year.
Market breadth improved as buying interest emerged in fundamentally strong stocks, particularly within the banking, consumer goods, and select industrial sector. Improved sentiment was supported by expectations of stable macroeconomic policy direction, resilient corporate earnings prospects, and easing selling pressure that had dominated earlier sessions. While volumes remained moderate, the positive close signaled a short-term shift in momentum toward the bulls.
Looking ahead, the market is likely to maintain a cautiously positive tone, though gains may be modest. Investors are expected to remain selective, focusing on stocks with attractive valuations, dividend prospects, and earnings visibility. Profit-taking could surface after the recent advance, especially in stocks that have recorded sharp short-term gains.
Key drivers to watch include liquidity conditions, year-end positioning by institutional investors, and evolving macroeconomic signals. Overall, while near-term volatility cannot be ruled out, the positive close last week provides a supportive base for the market to begin the new week on a steady footing, sentiment seems to lean more toward potential gains instead of aggressive sell-offs.
How sustainable is the growth in the share price of Mecure?
Mecure has continued to exhibit remarkable share price strength, with its stock surging sharply in recent weeks on robust fundamentals and strong market interest. After a prolonged uptrend through 2025, the share price jumped past key psychological levels, splitting higher from earlier lows and reflecting heightened bullish momentum. Year-to-date gains have been substantial, with the stock appreciating significantly from earlier in the year, underscoring strong price action dynamics.
Technical indicators reinforce the bullish price action. Moving averages and momentum tools and trend oscillators broadly signal a “Strong Buy”, pointing to sustained upside momentum in the near term. This suggests that the recent advance is not purely speculative but aligned with prevailing trend strength.
The recent price acceleration has been supported by exceptional operational performance: substantial revenue and profit growth year-on-year, with sales nearly doubling and profitability expanding on improved margins. Higher operating earnings and strategic capacity expansion have boosted investor confidence.
Despite this positive backdrop, sustainability of the rally warrants caution. The company has expanded aggressively, partly through debt, and rising leverage could dampen future earnings if cost of capital increases or operating headwinds emerge. While current earnings appear sufficient to cover interest obligations, narrower interest coverage after recent commercial paper issuance signals heightened risk if macro conditions shift.
Overall, the combination of strong price momentum and improving fundamentals underpins the recent share price growth. However, sustainability will depend on continued earnings delivery, prudent balance sheet management, and broader market appetite for growth stocks. Investors should balance technical momentum with fundamental vigilance, particularly around leverage levels and sector-specific demand trends, to assess whether the current uptrend can endure.
Is First Holdco a good buy at N53?
First HoldCo’s share price has risen strongly in recent weeks, climbing to around N53.00 after breaking above key resistance levels and moving far above its 50-day moving average of about N32.50. This move shows growing investor confidence and confirms that the stock has entered a bullish phase.
The break above the 50-day average signals that the stock has moved out of a sideways trend into a clear uptrend. Demand has been supported by continued buying from insiders and major shareholders, which is often a positive sign that those closest to the business are confident about its future. However, technical indicators suggest the stock may be overbought in the short term, meaning a temporary pullback or price pause is possible as early buyers take profits.
From a business perspective, First HoldCo has recorded strong growth in gross earnings and net interest income, pointing to improvements in its core banking operations. That said, overall profitability has been mixed, as higher operating costs and weaker non-interest income continue to pressure earnings. Still, the increasing stake taken by top management and major investors reflects confidence in the group’s restructuring plan and long-term growth prospects.
At the current price, the stock is trading above most near-term analyst price targets, which suggests limited upside in the short run. Together with overbought technical signals, this increases the chance of short-term price corrections.
On the medium-term investors sentiment, First HoldCo remains a “BUY” at N53.00 for investors who can tolerate volatility. The strong upward trend, insider confidence, and improving earnings base support further growth over time. While for the short-term traders, caution is advised. Entering gradually while waiting for a price pullback may help reduce risk.
How attractive is FTN Cocoa at N5.10
FTN Cocoa, trading around N5.10, presents a high-risk, selective opportunity for investors, largely driven by price action rather than strong fundamentals. The stock has shown renewed interest at low price levels, attracting speculative demand typical of penny stocks, especially during periods of broader market optimism.
At N5.10, FTN Cocoa is trading close to its recent support zone, suggesting downside pressure may be limited in the near term. Any sustained move above immediate resistance could trigger short-term momentum buying. However, liquidity remains thin, and price swings can be sharp, making the stock vulnerable to volatility and quick reversals.
From a fundamental standpoint, FTN Cocoa continues to face structural challenges, including weak earnings visibility and inconsistent operating performance. While the cocoa value chain offers long-term potential, this has yet to translate into stable profitability for the company. As such, the current valuation is driven more by market sentiment than by earnings strength.
FTN Cocoa at N5.10 is speculative rather than fundamentally attractive. While short-
term price movements may offer trading opportunities, sustained upside will depend on meaningful improvements in operations, earnings delivery, and corporate execution. Investors should approach with disciplined risk management and clear exit strategies.
Why is Legend Internet trending down?
Legend Internet has continued to trade on a downward trend, largely reflecting investor caution rather than outright rejection of its growth trajectory strategy. The weak price performance is tied to concerns around funding, execution risk, and near-term dilution, despite the company’s ambitious expansion plans.
A key factor weighing on the stock is the company’s plan to raise additional capital through an increase in share capital. While this move is intended to fund growth, the market is discounting the dilutive impact of new shares on existing investors. In the absence of clear timelines, pricing details, and earnings impact, investors are adopting a wait-and-see approach.
In addition, Legend Internet’s strategy to acquire an existing telecom licence, expand broadband infrastructure, and purchase a Microfinance Bank represents a significant shift in scale and complexity. While these initiatives could diversify revenue and strengthen long-term growth, they also raise concerns about execution capacity, integration risk, and funding pressure. Markets typically penalise stocks when expansion plans are capital-intensive and earnings benefits are expected only in the long term.
The lack of immediate revenue uplift from these initiatives further explains the weak sentiment. Investors are focused on short-term cash flow visibility, and until there is clarity on how quickly the telecom and financial services acquisitions will translate into earnings, the stock is likely to remain under pressure.
The current downtrend reflects uncertainty, not necessarily a failure of strategy. A reversal in sentiment will likely depend on clear communication on capital-raising terms and evidence of revenue and cash flow traction from broadband and financial services operations.
Until then, Legend Internet’s stock may continue to trade defensively as investors price in dilution risk and execution challenges.
What are the stocks to watch?
These are some of the likely stocks to watch going forward, which include Vitafoam, PZ, MeCure, MTN, Alex, Champion, First HoldCo, BUA Cement, UBA, UPDCREIT, NPFMCRFBK, Dangote Sugar, and many others.