Lagos, Nigeria – The Nigerian stock market recorded a notable 2.2 per cent gain last week, propelled by the strong performance of oil and gas equities, pushing the year-to-date yield to an impressive 26.6 per cent. This positive momentum was achieved despite a discernible decline in trading volume. Investors and analysts are now keenly anticipating the release of earnings reports from four of the nation's major lenders, along with those of other significant large-cap companies, which are expected to influence the market's direction in the short term.

Analysts at Meristem Securities cautioned that “Investors may still seek to lock in gains on stocks that have posted strong year-to-date returns, especially amid lingering caution following the recent NGX advisory on price movements.” However, they also noted that “The broader macroeconomic backdrop remains relatively supportive, and liquidity conditions appear stable, which should help sustain investor confidence.”

In a week characterized by a surge in crude oil prices, the Nigerian stock market closed higher, with gains recorded in four out of the five trading sessions. Investors continued to demonstrate a preference for fundamentally strong stocks across various sectors. Bargain hunting by market participants capitalized on recent price corrections, allowing for the rebuilding of positions in blue-chip and mid-cap equities. The Nigerian Exchange (NGX) All Share Index (ASI) rose by 2.14 per cent week-on-week (WoW), closing at 196,968.15 points, up from 192,826.78 points the previous week. This upward movement was significantly influenced by notable gains in companies such as Dangote Cement (up 4.6%), MTN (up 4.0%), BUA Cement (up 2.7%), and ARADEL (up 9.1%).

Trading activity saw a decline in both volume and value, with trading volume decreasing by 32.7% WoW and value by 31.7%. Sectoral performance was mixed, with the Oil & Gas Index leading the pack with a 9.4% growth. The Industrial Goods Index followed with a 3.9% increase, and the Banking Index edged up by 0.2%. Conversely, the Insurance Index experienced a decline of -1.9%, and the Consumer Goods Index saw a marginal drop of -0.1%.

The global oil market developments played a crucial role in shaping investor sentiment. Crude oil prices extended their rally, rising by more than three percent as escalating geopolitical tensions in the Middle East disrupted supply routes and heightened concerns over global crude availability. Brent crude climbed to approximately $84 per barrel, marking its fifth consecutive day of gains, while U.S. West Texas Intermediate crude rose to around $78 per barrel. These price increases are attributed to tightening supply conditions resulting from attacks on oil tankers and disruptions to refinery operations in regions including the Middle East, China, and India.

Looking ahead, analysts at Cordros Capital anticipate “cautious trading as investors lock in gains from recent market advances while closely monitoring geopolitical developments.” They added that, “Over the medium term, market direction is likely to be shaped by macroeconomic trends, Q1-26 earnings releases, corporate actions, and the durability of both foreign and domestic investor flows.”

Analysts at InvestData Consulting Limited commented that “For Nigeria, the sustained rise in crude oil prices could provide a positive boost to government revenue and foreign exchange inflows, given the country’s heavy reliance on oil exports. Higher oil prices may also strengthen investor sentiment toward energy-related equities listed on the Nigerian Exchange.” They concluded, “Looking ahead, the market may continue to experience mixed trading sessions as investors balance profit-taking with fresh accumulation. Nonetheless, sustained institutional demand, improved earnings expectations, and supportive global oil prices could continue to provide a favourable backdrop for the Nigerian equities market.”

PREMIUM TIMES has identified several stocks with strong fundamentals that could offer investment opportunities. These picks are based on rigorous market analysis and are intended to guide investors in making strategic positions with the expectation of reasonable price appreciation over time. These recommendations are not formal buy, sell, or hold advice, and investors are encouraged to consult with their financial advisors before making any investment decisions.

Mutual Benefits was highlighted as a top pick due to its strong fundamentals and trading below its intrinsic value. The insurer boasts a net profit ratio (NPR) of 22.2 per cent and a price-to-earnings (PE) ratio of 5.2x, with a relative strength index (RSI) of 61.

Fidelity Bank was selected based on its robust fundamentals, with an NPR of 19.1 and a PE ratio of 3.7x. Its RSI stands at 40.8.

Transcorp made the list for trading below its intrinsic value. The company reports an NPR of 25 per cent and a PE ratio of 6x, with an RSI of 50.3.

Vitafoam was also noted for trading below its intrinsic value, reporting an NPR of 23.8 and a PE ratio of 11.4x, with an RSI of 53.2.

Lafarge Africa was recommended for its strong fundamentals, featuring an NPR of 29.4 per cent and a PE ratio of 12.4x, supported by an RSI of 66.8.