Nigeria’s stock market has delivered record-setting returns in the first seven months of 2025, with investors gaining over ₦25.7 trillion in capital appreciation as of July 31—a 35.9% year-to-date (YtD) surge.
Driven by stabilising macroeconomic fundamentals, liberalisation of key sectors, and renewed domestic and foreign investor confidence, the market capitalisation of the Nigerian Exchange Limited (NGX) soared to ₦88.4 trillion last weekend, up from ₦62.7 trillion at the end of December 2024.
The NGX All-Share Index (ASI), a benchmark of overall market performance, closed July at 139,863.53 points, rising from 102,926.40 points in December. Notably, July alone accounted for nearly half the YtD gain, with a 16.5% monthly return.
However, analysts warn that the rally—dubbed the “Tinubu Boom”—may soon face a correction, citing concerns over mispricing and market exuberance.
“No market sustains a rally indefinitely, even in the best of times,” said David Adonri, Executive Vice Chairman at High Cap Securities. “After the exuberant July, a moderate correction may occur in Q3 to expunge some mispricing.”
Volume Spikes, Broader Participation
Investor activity surged as well. The Exchange recorded a 59% increase in share volume, with 22 billion shares traded in July, up from 13.8 billion in June. Five out of the past seven months closed in positive territory.
Performance has been broad-based, though sectoral disparities persist. Industrial Goods stocks led the YtD chart with a 71.9% rise, followed by Banking (49.3%) and Insurance (23.5%). The Oil and Gas sector, by contrast, declined 10.2%.
Heavyweights like Dangote Cement, BUA Cement, and Lafarge Africa were key drivers of industrial growth. In the banking sector, Wema Bank (+47.2%), UBA (+40.2%), and Zenith Bank (+34.3%) were standout performers, while Sovereign Trust Insurance and Cadbury Nigeria topped the insurance and consumer goods segments respectively.
Analysts Split on Market Sustainability
Investment firms such as Cordros Capital remain bullish. “With most H1’25 results in and broadly ahead of expectations, we expect the market rally to persist as investors reposition and re-price for earnings upside,” it noted in a commentary.
Others were more cautious. “The possibility of a crash is remote unless there’s a monumental shock,” said Adonri, “but price corrections are normal.”
According to Tajudeen Olayinka, investment banker and stockbroker, improved FX liquidity, declining interest rates, and recovering corporate performance are fuelling the current bullish sentiment. However, he cautioned that “price corrections may set in once market fundamentals can no longer be defined.”
Policy, Risk and the Road Ahead
Olayinka also urged the government to adopt more market-friendly policies, warning that punitive measures such as the proposed 30% capital gains tax could deter investment.
“Foreign portfolio investment is unstable,” he noted. “But the growing dominance of domestic investors offers the market a buffer against volatility.”
The influx of domestic capital, alongside expectations that some companies will tap the market for fresh funding, could cool overheating. According to Olayinka, bonus issues, rights offerings, or listings by introduction may “improve the supply side of the market.”
While macroeconomic stability and policy clarity remain central to market confidence, analysts agree that volatility remains a natural feature of equity markets. Sound risk management, they warn, is essential as investors look to lock in gains in the second half of the year.
