Ruth Ibikunle
Transactions on the floor of the Nigerian Exchange last week closed on a positive note with 2.45% 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 respectively.
In a stock market review with Mr. Gilbert Ayoola, a seasoned capital market analyst, the following were discussed:
Excerpts:
The stock market last week closed on a positive note with 2.45% growth. What is the driving force?
The Nigerian stock market closed last week on a firmly positive note, recording a 2.45% gain as renewed investor confidence supported a wave of strategic, selective positioning across key sectors. The rebound signals a strengthening recovery phase, driven by improving market sentiment, bargain hunting, and expectations of better corporate earnings.
Investor activity was notably more deliberate, with portfolios tilting toward fundamentally strong stocks in banking, telecoms, energy, and consumer goods. This selective approach reflects a broader shift toward value and stability after weeks of volatility. Increased liquidity in the equities market further reinforced the uptick, highlighting growing appetite for risk assets amid stabilising macroeconomic indicators.
The week’s performance underscores a market gradually regaining momentum, with investors positioning ahead of anticipated policy clarity and medium-term economic improvements. If current sentiment persists, the broader recovery trajectory is likely to strengthen in the coming weeks.
What is the outlook for the new week?
With expectations of a continued recovery in the equities market, sentiment for the new week remains mildly positive as investors maintain selective positioning in fundamentally strong stocks. The improving outlook is supported by renewed confidence and a gradual return of liquidity to the market.
However, the money market’s sustained attractiveness, driven by comparatively high yields and lower risk, continues to create a competitive pull, particularly for conservative investors. This may limit the pace of equity inflows, keeping market activity stable but measured.
Overall, the week ahead is likely to see a balanced performance: equities should benefit from recovery momentum, while the money market’s appeal tempers excessive volatility. Investors are expected to adopt a cautious mix of value hunting in stocks and strategic allocation to fixed-income instruments.
What is driving the growth in UACN, Guinness, Dangote Cement, and Nigerian Breweries?
The recent price recovery and improved market sentiment have strengthened demand for several fundamentally strong counters, with UACN, Guinness, Dangote Cement, and Nigerian Breweries posting notable gains. Their upward movement is largely driven by a combination of improved investor confidence, strategic repositioning, and sector-specific catalysts.
For UACN, renewed interest stems from its ongoing restructuring efforts, stronger balance-sheet outlook, and expectations of improved earnings from its diversified consumer-focused portfolio.
Guinness and Nigerian Breweries are benefiting from anticipated margin recovery as cost pressures gradually ease, alongside positive sentiment toward consumer goods stocks expected to rebound from prior input-cost challenges.
Dangote Cement continues to attract investors on the back of its strong market leadership, stable cash flows, and growing optimism around infrastructure spending, which supports volume growth expectations.
Overall, these counters are gaining from a mix of solid fundamentals, attractive entry prices, and the broader shift toward quality stocks as investors’ position for sustained market recovery.
Is Mecure a good buy at N29.80?
Against the backdrop of improving cost conditions in the healthcare and pharmaceutical value chain, Mecure Industries continues to draw investor interest as operational efficiencies strengthen sector prospects. At a current price of N29.80, the stock trades modestly above its 50-day moving average of N28.38, signaling sustained positive momentum and steady demand.
Compared with industry peers, Mecure appears reasonably priced, supported by its growing market presence, expanding distribution capacity, and exposure to rising domestic demand for affordable healthcare products. The slight premium to its short-term average reflects renewed confidence rather than overvaluation, suggesting investors are positioning ahead of expected margin stability.
While broader sector risks remain, Mecure’s improving fundamentals and technical support levels make it a relatively attractive “buy option” especially for investors seeking medium-term exposure to healthcare growth.
How attractive are the following: UBA, Ecobank, Zenith, GTCO, and Access Holdings?
With improved earnings performance and strengthening market confidence in the financial services sector, Tier-1 banks remain some of the most attractive plays for investors seeking value, resilience, and consistent returns. UBA, Ecobank, Zenith, GTCO, and Access Holdings continue to stand out on the back of strong fundamentals and expanding profitability.
UBA – continues to screen attractively for investors, supported by resilient earnings momentum and a rapidly expanding pan-African franchise that reduces concentration risk and enhances currency-diversified income. Its current share price of N40.00 sits well below the 52-week high of N50.55, suggesting the stock is trading at a discount not justified by fundamentals.
Core metrics remain solid with a “buy optimism” in line with consistent profit-after-tax growth, strong deposit mobilisation, expanding asset base, and an improved capital position all reinforce UBA’s structural strength. These indicators point to a bank that is fundamentally sound and positioned for sustained growth despite broader macroeconomic headwinds.
UBA presents a compelling value opportunity. The current discount appears driven more by market volatility than operational weakness, giving the bank clear upside potential as sentiment and macro conditions stabilise.
Ecobank– remains an appealing play for investors seeking broad African exposure, backed by its entrenched regional footprint and strong foreign-currency earnings. The bank’s Q3 2025 performance underscores its resilience with total assets rising to N47.97 trillion, customer deposits increased to N35.68 trillion, and shareholders’ equity strengthened to N3.69 trillion, reflecting solid balance-sheet growth and improving capital buffers.
At N36.90, the stock appears fairly valued with a measured -8% upside toward N39.90, supported by its position above short-term technical levels. For investors with a 6–12-month horizon, Ecobank offers a balanced proposition, steady near-term return potential anchored by robust fundamentals and long-term value tied to its diversified pan-African operations.
Zenith – remains a compelling option for value-focused investors, underpinned by its strong capital base, consistent dividend record, and disciplined cost structure. The bank continues to deliver credible topline growth, supported by a resilient interest-income earning. With softer non-interest income and diluted EPS following recent capital raising temper near-term momentum, core fundamentals remain intact.
Asset quality has improved meaningfully, with the NPL ratio declining to about 3%, aided by write-offs and prudent provisioning. Liquidity and capital buffers also remain solid, critical strengths in today’s challenging macro environment.
At N62.20, Zenith screens as a stable medium to long-term opportunity (12–24 months). The bank’s strong core franchise and sound risk management position it to trend back toward its 52-week high, offering investors dependable value supported by robust fundamentals.
GTCO – remains attractive for investors seeking a blend of high asset quality, operational efficiency, and strong profitability. The group’s expanding non-bank subsidiaries continue to enhance long-term earnings diversification and growth prospects.
Q3 results reinforce this strength when total assets rose to N16.7 trillion, net loans expanded to N3.24 trillion, and deposits increased to N12.06 trillion, while shareholders’ funds climbed to N3.3 trillion, all pointing to a healthier, well-capitalised balance sheet.
At N89.00, the stock sits close to its 50-day moving average of N89.68, indicating fair near-term pricing. Yet it remains below its 52-week high of N103.20, leaving a potential 16-17% upside should sentiment normalise.
With resilient recurring earnings, improved asset quality, and solid Q3 fundamentals, GTCO’s discount to its peak appears driven more by market caution than performance issues. For medium-term investors, it remains a “steady accumulate” recommendation.
Access Holdings– continues to appeal to investors through its aggressive expansion, rising earnings capacity, and diversified group structure spanning banking, payments, and consumer finance.
For the nine months ended September 30, 2025, gross earnings rose 14.1% year-on-year to N3.9 trillion, while total assets grew to N52.0 trillion from N41.5 trillion at end of 2024, underpinned by robust deposit and loan growth, highlighting a well-funded, expanding lending franchise.
Trading at N22.30, below its 50-day moving average of N23.53 and well under the 52-week high of N28.95, the stock offers a potential -30% upside if it returns to prior peak levels.
Strong Q3 fundamentals, growth in interest and fee income, improved efficiency, and balance sheet expansion suggest the discount reflects broader market caution rather than operational weakness. Access Holdings, therefore, presents a compelling “accumulation opportunity” for medium-term investors seeking growth anchored by solid fundamentals.
What are the stocks to watch?
These are the likely stocks to watch: BUA Cement, UBA, Lafarge Wapco), ETI, Zenith, GTCO, BUA Foods, MTN, Presco, International Breweries, UACN, Ikeja Hotels, Transcorp, Access, and many others.