Stock market poises for Q2 growth amid bullish momentum, stakeholders optimism

The Nigerian stock market, as tracked by the All-Share Index (ASI), continues to ride a wave of bullish momentum into 2025, following an impressive 37.7 per cent year-to-date increase in 2024 and a remarkable 39 per cent surge in January of that year.

Despite a setback in the second quarter of 2024, when the index declined by 4.3 per cent, the first quarter of 2025 has so far mirrored the bullish trend of the first quarter of 2024, with the index climbing over 4,800 points and surpassing the 107,500 mark as of February 13, 2025.

As investors and analysts look ahead to Q2 2025, market watchers are keen to determine whether the ASI will maintain its upward trajectory or experience the retracements that marked the same period last year.

The ASI’s upward momentum, which began in December 2024, has persisted into 2025. Starting the year at 102,928.57, the index has closed six out of seven trading weeks in the green, surpassing critical thresholds at 105,000 and 106,000.

A minor dip in the third week saw the index fall to 102,353.68, but it quickly rebounded past the 107,000 barrier by February 12, 2025.

However, technical indicators such as the Relative Strength Index (RSI) and the Stochastic Oscillator suggest that the market may be overbought, potentially signaling a retracement or correction in the near term. Conversely, the Moving Average Convergence Divergence (MACD) remains in bullish territory, supporting continued gains.

Industry analysts remain cautiously optimistic about the market’s prospects in Q2 2025. Samuel Oyekanmi, research lead at Norrenberger, predicts increased investor interest in equities as yields on debt securities decline.

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“As yields on debt securities decline, we may see more investors shifting their focus to equities,” Oyekanmi stated. He cited data from the Debt Management Office (DMO), which showed that Nigeria’s Eurobond yield fell to 9.13 percent on February 4, 2025, marking the lowest level in nearly 39 days.

Echoing Oyekanmi’s optimism, Mr. Olatunde Amolegbe, MD/CEO of Arthur Steven Asset Management, expects the ASI to either stabilize or gain additional momentum in Q2 2025.

He pointed to fundamental factors such as the rapid recapitalization of the banking sector and increased oil production as key drivers of investor confidence.

“The banking recapitalization process is progressing swiftly, as evidenced by the recent release of allotment results. Public offerings have attracted strong investor engagement,” Amolegbe stated, adding that the second quarter could further bolster market sentiment.

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Chris Njoku, Multi-Assets Portfolio Manager at FBNQuest, highlighted the possibility of new listings on the Nigerian Exchange (NGX), including major entities such as the Nigerian National Petroleum Corporation (NNPC) and Dangote Refinery.

“There are possibilities that we might see some new listings in the second quarter including NNPC and Dangote Refinery,” Njoku remarked, suggesting that these developments could provide additional liquidity and strengthen the All-Share Index.