Ruth Ibikunle
The Nigerian stock market last week closed on a bullish note with 1.57% growth. Year to date, the market has returned 16.58% with the All Share Index and Market Capitalisation at 119,995.76 points and N75.962 trillion respectively.
In a stock market review with Gilbert Ayoola, a seasoned capital market analyst, the following were discussed:
Excerpts:
• The stock market last week closed on a positive note with 1.57% growth. What is the outlook for the week?
The Nigerian stock market closed last week on a strong note, with the NGX All-Share Index gaining 1.57% to settle at 119,995.76 points. The rally was driven by increased investor interest in banking and industrial goods stocks, supported by earnings expectations, dividend positioning, and macroeconomic optimism. Portfolio rebalancing and bargain hunting also contributed to the positive sentiment. However, intermittent profit-taking may persist, mild volatility in the new week, though overall market outlook remains bullish.
• What will likely be the impact of the new tax regime on the stock market?
The Federal Government’s new tax regime is expected to have a broadly positive impact on the stock market. Key reforms such as reduced corporate income tax, dividend and securities transaction exemptions, and startup incentives should boost corporate earnings and market liquidity. While VAT adjustments and implementation risks remain, the overall framework supports a favourable long-term investment climate.
• What is driving the growth in Neimeth, International Breweries, CWG, Champion Breweries, and Learn Africa?
The market rallies in these companies are driven by solid corporate actions, strong earnings growth, turnarounds, and sectoral improvement with the industry. Also, based on the underpinned factor
Neimeth – Following brand turnaround efforts and sector revival, which is regaining traction among improved operating outlook and investor optimism around its strategic restructuring, thereby fueling gains.
International Breweries -The Company’s launch of a rights offer to repay its U.S. dollar denominated loans, reducing foreign exchange exposure and improving earnings outlook. This deleveraging move has positively resonated with investors’ expectations.
CWG -The Company continues to benefit from expanding IT infrastructure contracts and digitalisation demand. Recent financial reports showing margin improvements and recurring revenue growth from managed services as kept market sentiments bullish. At the present price of N11.50 to 52-week high of N12.70, it looks attractive for a positive positioning.
Champion Breweries– Profit before tax surged nearly 318% year-on-year in Q1 2025 (to N1.74 billion), with revenue nearly doubling to N8.48 billion. The firm is now debt-free, cash-rich, and enjoying strong margins, which drives a 10.98% share price rally as of Friday, June 27.
Learn Africa- Learn Africa is currently riding on the waves of increased textbook demand, post-CBT exam reforms and education budget boosts. Higher-than-expected with anticipated half-year revenues and investor hopes around government contract wins underlie the stock’s advance. Further supported by 52-week high of N5.79 when compared to its 50-day moving average at N4.09.
• How attractive is Oando at N56.50?
At N56.50, Oando trades below its recent high of N62.00, offering a compelling entry opportunity. Despite its Q1 profit being tax-driven, the stock’s low forward P/E (-6x) makes it attractive for risk-tolerant investors awaiting an operational rebound.
• Is the merger between Dangote Sugar, NASCON, and Dangote Rice likely to happen this year?
Given the unresolved issues with Dangote Rice, the proposed merger between Dangote Sugar, NASCON, and Dangote Rice is unlikely in 2025, as SEC concerns over Dangote Rice’s inactive status remain unresolved. No recent developments indicate the process will resume this year.
• What is driving the growth in Unilever and PZ?
Unilever and PZ have recently attracted strong investor interest, driven by clear improvements in their financial and operational performance.
Unilever Nigeria has delivered robust earnings, with FY 2024 profit nearly doubling year-on-year, supported by revenue growth, cost efficiency, and a strategic focus on core product lines. Its strong cash position and streamlined operations have boosted investor confidence, fueling share price appreciation.
While PZ is benefiting from balance sheet restructuring, including a major debt-to-equity conversion that eased FX pressure. Improved top-line performance and narrowing losses signal an ongoing turnaround. Strategic pricing and efficiency gains have also supported its upward momentum.
Together, these metrics have shifted investor positioning toward these stocks in line with their fundamentals and visible recovery paths.
• What are the stocks to buy?
Expect continued sector rotation into industrials, consumer goods, real estate, telecoms, banking, and manufacturing.
Here are the top stocks to watch for potential buys:
Beta Glas, Honeywell, Berger Paints, UPDC, Champion, Dangote Cement, MTN, GTCO, Chellarams, Vitafoam, Presco, Transcorp Power, and many others to mention a few.