Nigerian equities edged higher in cautious trading Wednesday, with the NGX All-Share Index rising 0.12% to hold above the psychologically critical 106,000-point level, even as lagging financial and health tech stocks tempered gains.
The mixed session reflected investor hesitancy amid uneven macroeconomic signals, though cooling inflation and improving business activity offered tentative optimism.
Financial heavyweights dragged the index lower, with Guaranty Trust Holding Co. (GTCO) sliding 1.79%, United Bank for Africa (UBA) down 0.68%, and First Holdings Plc dipping 0.35%. Zenith Bank bucked the trend, rising 0.52%, while industrial stalwarts Dangote Cement and Bua Foods flatlined—a sign of risk aversion in Africa’s largest economy. Sector performance diverged sharply, with health technology and process industries underperforming amid muted earnings outlooks.
Macroeconomic tailwinds provided a partial offset. Annual inflation plummeted to 24.48% in January from December’s 34.8%, its steepest drop in over a decade, while the Purchasing Managers’ Index (PMI) climbed to 53.7 in February, signaling expanding business activity. Analysts note that easing price pressures could bolster corporate margins and consumer spending, though employment growth remains stifled by high operational costs. “The inflation retreat is a relief valve, but firms aren’t hiring yet—they’re prioritizing cost containment,” said Chapel Hill Denham economist Ifeoma Udoh.
Global risks loom. Escalating U.S.-China trade tensions threaten to disrupt supply chains for Nigerian manufacturers reliant on imported raw materials, while potential tariff spillovers could pressure the naira. For now, equities tread water, with market participants awaiting clearer policy signals from Abuja and firmer commodity trends. “Investors are pricing in ‘neutral for longer’—no rate cuts, no shocks,” said Vetiva Capital trader Nnamdi Okezie. “The stalemate breaks when FX liquidity improves or oil rallies.”
With the NGX trading at 12.7x forward earnings—below its five-year average—value hunters eye bargains, but sector selectivity prevails. For now, the market’s stalemate mirrors Nigeria’s economic tightrope: progress visible, prosperity elusive.
