Lagos: The equities market continued its upward trajectory in May, with investors witnessing a gain of N4.514 trillion, spurred by renewed buying interest in financial services and consumer goods stocks. Market capitalisation saw a 2.89 percent increase, closing at N160.508 trillion, up from N155.994 trillion at the start of the month. The All-Share Index (ASI) also climbed by 8,107.66 points, or 3.35 percent, reaching 250,385.47 from 242,277.81 at April’s end.
According to News Agency of Nigeria, the market’s performance in May, while positive, fell short of April’s exceptional rally, where investors gained N26.185 trillion. The gains were primarily led by financial services, consumer goods, and selected industrial stocks. Dr. Bennett Eze, Head of Research and Development at the Chartered Institute of Stockbrokers, shared that the market’s performance reflected a more cautious and selective investment environment.
Eze explained that the slower growth in May was largely due to profit-taking by investors following April’s historic rally. Many investors sought to lock in gains, particularly in banking, industrial, and consumer goods stocks, leading the market into a consolidation phase as stock valuations were reassessed. He noted that the slower market growth could also be attributed to a rotation into fixed-income instruments, valuation concerns, and global uncertainties.
Despite the equity market’s allure, relatively high yields in the fixed-income market continued to compete for institutional funds, moderating equity inflows. Some fundamentally strong stocks became significantly overbought after April’s surge, prompting investors to be more selective with new capital. Eze also highlighted concerns about oil prices, geopolitical developments, and global monetary policy direction, which encouraged a cautious approach among foreign investors.
Eze observed that relative stability in the foreign exchange market and growing confidence in ongoing economic reforms further bolstered investor sentiment. Dividend-related positioning and corporate actions also supported demand for fundamentally strong companies.
Looking ahead, Eze expressed optimism about the market’s outlook for June and the second half of 2026, although he cautioned that volatility might increase. He projected that the market would remain bullish in June, with investors focusing more on earnings sustainability rather than momentum-driven buying. Periodic pullbacks are anticipated following the strong gains recorded in the year’s first five months.
Eze suggested that continued exchange-rate stability could attract additional foreign portfolio inflows, and moderating inflation paired with potential monetary easing later in the year may improve equity valuations. Banking sector recapitalisation is expected to strengthen confidence in financial stocks. Pension funds and institutional investors are likely to maintain significant exposure to equities due to long-term return prospects. However, key risks include inflationary pressures, oil price volatility, potential weakening of corporate earnings, and political positioning ahead of the 2027 election cycle.
On the sectoral outlook, Eze identified banking stocks as the market’s major attraction, citing stronger capital bases, robust earnings potential, digital banking expansion, and improved investor confidence following recapitalisation efforts. He also highlighted consumer goods, industrial goods, insurance, energy, and telecommunications stocks as sectors likely to benefit from improving economic conditions, infrastructure spending, sector reforms, and strong cash flow generation.
The market experienced 18 trading sessions in May, comprising 11 bullish sessions and seven bearish ones. Trading activities saw investors exchange 21.120 billion shares valued at N971.628 billion across 1,453,439 deals, marking an improvement compared to April’s 15.596 billion shares worth N848.972 billion in 1,113,650 transactions.
Major gainers included Guaranty Trust Holding Company, which rose from N135 to N137, and Ecobank Transnational Incorporated, advancing from N80.60 to N97.40. First Holdco appreciated from N64.65 to N70, and United Bank for Africa gained from N42.75 to N44.50. Airtel Africa climbed from N3,021.30 to N3,655.70, Eterna increased from N32.80 to N34.45, while Learn Africa appreciated from N9.30 to N12.75. Berger Paints also posted significant growth, rising from N81.75 to N147.60 during the month.
On the downside, Nigerian Aviation Handling Company declined from N258 to N189.50, while Guinness Nigeria fell from N497 to N402.60. Access Holdings depreciated from N27 to N24.05, MTN Nigeria dropped from N915 to N820, and Aradel Holdings dipped from N2,024 to N1,933.80. Meanwhile, the share prices of TotalEnergies Marketing Nigeria and Conoil remained unchanged at N640 and N194, respectively, throughout the month.