NGX Market Performance and Outlook for August 2026
The Nigerian equities market is poised for August 2026 with a focus on oil and gas stocks, banks, and undervalued companies. Following a turbulent three months, the NGX All-Share Index recovered most of its June losses, rebounding 7.82% in July to 247,357.40 points. This leaves the index only 1.21% below its May peak of 250,385.70 points.
The recovery was uneven across sectors. Banking stocks surged 22.95% in July, ending 7.93% above their May level. The NGX 30 also recovered nearly all its June losses, standing only 0.38% below May. However, oil and gas and industrial goods sectors recovered only 3.47% and 3.77% respectively in July, remaining 12.12% and 13.89% below their May levels. Insurance recovered about half its June decline but was still 6.59% below May, while consumer goods fell another 1.87% in July, remaining 8.07% below its May level.
Market tailwinds for August include renewed hostilities in the Middle East, which could keep crude oil prices elevated, benefiting upstream producers. The Central Bank of Nigeria's decision to retain the Monetary Policy Rate at 26.5% is expected to sustain strong interest income for banks. Conversely, high borrowing costs may weaken credit demand and increase asset-quality risks for banks. Higher petrol and transport costs could also push inflation higher, potentially impacting household spending and raising operating costs for manufacturers.
Top Stock Picks for August 2026
Aradel Holdings
Aradel Holdings is recommended for August due to its rapid expansion and a share-price decline that has created an entry point. The stock fell 26.7% from N1,933.80 in May to N1,417.50 in June, with a 7.7% recovery in July to N1,526.80. It remains 21% below its May level and nearly 25% below its 52-week high.
The company's earnings continue to grow, with Q1 2026 revenue of N728.52 billion surpassing the N699.43 billion reported for the entirety of 2025. Quarterly profit reached N120.29 billion, approximately 30% of last year's total, building on an estimated five-year profit growth of roughly 92%. Aradel is reasonably valued at 8.4 times earnings, supported by a 56.6% return on equity and 15.5% return on assets. Its low beta indicates lower historical market sensitivity, and higher crude prices could provide an added catalyst in August.
Zenith Bank
Zenith Bank is an August pick, combining strong profitability, consistent dividends, and broad analyst support. Trading at N126.50, the stock is valued at about five times earnings and close to its book value. The bank reported revenue of N2.37 trillion, net income of N1.04 trillion, and an Earnings Per Share (EPS) of N25.37. Its return on equity stands at 21.7%, reflecting solid use of shareholders’ funds.
The stock offers an indicated dividend yield of about 7.9%, with all four reviewed brokers issuing Buy recommendations. Their average target price of N159.48 implies roughly 26% further capital upside from the current price of N126.50, before dividends. High interest rates are expected to continue supporting interest and treasury income, though risks of bad loans and weaker credit demand persist.
Access Holdings
Access Holdings is included in the August list as the market continues to price the group at a steep discount to its underlying value. The stock jumped from N22 in June to N29.20 in July but remains about 19% below its N36 reference high. At its current price, Access trades at only 2.1 times earnings and 0.4 times book value, reporting an EPS of N14.09 and a return on equity of 19.9%. Three reviewed brokers maintained Buy recommendations.
The July rally pushed its RSI above 83, suggesting a potential short-term pullback. Access has also begun addressing regulatory issues that previously prevented dividend payments, completing the sale of a 7.44% stake in its Ghanaian subsidiary. This move could bring the group closer to regulatory compliance and the restoration of dividends, adding another catalyst to its low valuation.
Custodian Investment
Custodian Investment offers strong profitability and exposure to both insurance and investment income. It is a buy in August due to its growing revenue and profit conversion, coupled with a reasonable valuation. Revenue increased nearly fivefold between 2021 and 2025, while profit rose more than sixfold. Q1 2026 results indicate continued growth momentum ahead of its H1 release.
Trading at N78.45, the stock is valued at about 6.1 times earnings and remains almost 13% below its 52-week high. This provides investors with strong earnings growth, a relatively low entry valuation, and room for further price recovery. Higher interest rates are expected to support returns on its investment portfolio, although inflation could raise claims and operating costs. While NEM remains a credible alternative, Custodian offers a stronger earnings and profitability profile.
Dangote Cement
Dangote Cement is favored among industrial stocks due to its market leadership, extensive distribution network, and strong cash generation, which provide resilience against rising costs. The company also maintains a consistent dividend record, adding income to potential price recovery. The stock fell from N1,180 in May to N963 in June before recovering to N1,034 in July.
At approximately 15.5 times earnings, with an EPS growth of 29.57%, it is not the cheapest option. However, three brokers still rate it as a Buy, with an average target price of N1,299.44. While global tensions could increase fuel, shipping, and input costs, and high interest rates may weaken construction demand, Dangote’s scale, pricing power, and dividend support position it better than most industrial peers.
CWG
CWG offers a favorable balance between proven growth and entry price, making it an attractive ICT pick. Revenue increased significantly from N11.71 billion in 2021 to about N65.56 billion in 2025, with profit rising more than tenfold. Its 2025 revenue grew 42%, accompanied by strong profit after tax, demonstrating visible growth in its accounts.
Trading at N20.80 and 18% below its 52-week high, CWG presents more recovery potential from a smaller earnings base. The selection criteria for these stocks emphasize meaningful revenue, positive earnings, and valuations linked to realistic business performance, avoiding companies where share-price rallies have outpaced underlying fundamentals.
