Stock Market Gains N1.95trn in January, FG Meets JP Morgan to Ramp Up Investment

*In recovery ratings, Fitch retains Nigeria, 13 others in category D

Ndubuisi Francis in Abuja, Nume Ekeghe and Kayode Tokede in Lagos  

The stock market appreciated by N1.95 trillion in January 2025, even as investors continue to adopt cautious trading on the Nigerian Exchange Limited (NGX).
This emerged as the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday received a high-level delegation from JP Morgan, led by, Head of West Africa, Dapo Olagunju, as the West African country seeks to ramp up investment inflows.

Also, despite the inclusion of five additional Organisation of Islamic Cooperation (OIC) countries by Fitch Ratings to its Country Groups for the Country-Specific Treatment of Recovery Ratings, about 70 per cent of OIC countries, including Nigeria have retained their categorisation in Group D in the latest assessment.

Specifically, the NGX market capitalisation added N1.95 trillion at the close of trading yesterday, rising from the N62.763 trillion it opened in 2025, to close at N64.709 trillion at the end of January.

When compared to January 2024, the market capitalisation gained N14.44 trillion.
Also, the NGX All-Share Index closed January 2025 at 104,496.12 basis points, about 1.53 per cent or 1,569.72 basis points Year-till-Date (YtD) higher from 102,926.40 basis points the stock market opened for trading this year.

Since the beginning of 2025, the stock market has witnessed cautious trading by investors, especially in the Oil & gas, insurance and Industrial Goods sub-sector, and it triggered massive sell-off in large company stocks quoted on the bourse.

The NGX Industrial Goods plummeted by -8.52 percent YtD to close at 3,267.66 basis points as of January 31 2025 following massive profit-taking in Dangote Cement Plc’s stock price by 17.7 per cent YtD from N394 per share it opened for trading to N478.80 per share as of January 31, 2025.

Also, the NGX Oil Gas Goods dropped by -1.61 in its YtD performance to 2,668.40 basis points over 4.8 per cent YtD decline in Aradel Holdings Plc to N569.3 per share as of January 2025 from N598 per share it opened for trading this year, as Totalenergies Marketing Nigeria Plc was down by 4.01 per cent to close at N670 per share.

In addition, the NGX Insurance index was down -1.10 per cent YtD on profit-taking in Sunu Assurances Nigeria Plc that dwindling significantly by 46.5 per cent from N10.75 per share it closed 2024 to close January 31, 2025 at N5.75 per share.

However, the outcome of a successful recapitalisation by some banks impacted on the NGX Banking index as it advanced   by 9.76per cent YtD growth to close January 2025 at 1,190.35 basis points on aggressive demand for Zenith Bank Plc, Access Holdings Plc Guaranty Trust Holding Company Plc.

In January 2025, the stock price of Zenith Bank and GTCO advanced by 11.2 percent and 7.1 percent to close January 31, 2025 at N50.6 and N61.05 per share, respectively.
The stock price of Access Holdings moved from N23.85 per share in 2024 close of market transactions, gaining about 9.01 percent YtD to N26.00 per share, while United Bank for Africa (UBA) Plc appreciated by 10.88 per cent to close January 2025 at N37.7 per share.

The Nigerian stock market had closed 2024 NGX ASI with an impressive annual growth of 37.65 percent amid double-digit inflation, Central Bank of Nigeria (CBN) increasing its monetary policy rate to 27.50 per cent that led to high yield on government securities  and unstable naira at the foreign exchange market.
Analysts stated that the stock market performance in January 2025, was a reflection of uncertainty in the domestic economy.

The Investment Banker & Stockbroker, Tajudeen Olayinka in a chat with THISDAY stated that stock market performance in January 2025 was not impressive due to 2024 year-end rally that came rather too late and unimpressive.

On President Donald Trump’s policies impacting the emerging market, he said, “I do not see any negative impact on the market from Trump’s presidency because Nigeria is an import- dependent nation, not to be seriously affected by Trump’s wall of tariffs.”
Hitherto, the Managing Director Arthur Steven Asset Management Limited (ASAM), Mr. Olatunde Amolegbe, said the stock market growth in 2025, was underpinned by ongoing bank recapitalisation efforts, new listings, and anticipated monetary policy easing by the CBN.

Amolegbe, highlighted Nigeria’s relative market attractiveness as a key factor in attracting increased foreign portfolio inflows (FPI), provided stable policies are maintained.
Overall, his firm added that, “the 2025 outlook for the Nigerian stock market remains optimistic, bolstered by strategic reforms, policy adjustments, and improving investor confidence. While challenges such as exchange rate instability and inflation persist, key sectors are positioned to drive market performance and deliver strong returns for investors.”

In the meantime, Wale Edun yesterday received a high-level delegation from JP Morgan, led by , Head of West Africa, Dapo Olagunju.
The meeting, which was held in Edun’s office in Abuja, was part of a fact-finding trip organised by JP Morgan, aimed at exploring investment opportunities and economic strategies in the country.

The delegation, which included major investors with significant holdings in Nigeria’s Eurobonds and local securities, was part of an exploratory visit organised by JP Morgan for a diverse group of international institutional investors seeking insights into the nation’s economic landscape.

The finance ministry, in a statement by its Director, Press and Public Relations, Mohammed Manga said during the discussions, the minister highlighted Nigeria’s recent economic milestones, including a successful Eurobond transaction completed without a roadshow.

Edun attributed the achievement to a strong global investor engagement.
He emphasised President Bola Tinubu’s ongoing efforts to attract foreign investment through strategic international engagements and reaffirmed the administration’s commitment to market-driven reforms.

Edun also pointed to key developments in the energy sector, including new agreements with the International Finance Corporation (IFC) aimed at expanding electricity access to 400,000 Nigerians in the first instance.
On inflation, the minister assured investors that the CBN was implementing orthodox monetary policies while the government works to boost agricultural production and stabilise food prices.

According to the statement, the meeting between the Edun and the JP Morgan delegation marks a significant step forward in Nigeria’s efforts to attract foreign investment and stimulate economic growth.
In the meantime, despite the inclusion of five additional OIC countries by Fitch Ratings to its Country Groups for the Country-Specific Treatment of Recovery Ratings, about 70 per cent of OIC countries, including Nigeria have retained their categorisation in Group D.

According to the latest ratings, this group consists of countries where recoveries given default range from average to poor, underscoring ongoing challenges in recovery projections.
The total number of OIC countries reported now stands at 19.
A recovery rating refers to a credit rating assigned to a debt instrument that indicates a likelihood of recovering a significant portion of the investment value even if the entity defaults, meaning the investor could still recoup some money even in the case of bankruptcy.

It reflects the percentage of a loan or an obligation that will be repaid to creditors in the case of default or bankruptcy.
In Fitch’s Country Groups for OIC, the United Arab Emirates (UAE) and Qatar continue to have the highest classification among the now 19 covered OIC countries, in Group B where recoveries given default range from superior to poor.

This is followed by Group C, where recoveries given default range from good to poor, and includes Saudi Arabia, Malaysia, Bahrain, and Oman.

Countries in Group D include Nigeria, Turkiye, Egypt, Indonesia, Bangladesh, Morocc, Tunisia, Azerbaijan, Jordan, Kazakhstan, Uzbekistan, Gambia, and Sierra Leone.

None of the 19 OIC countries are in Group A, where recoveries given default range from outstanding to poor.

Sukuk default rates globally are very low, at only 0.19 per cent of all sukuk issued as of end-2024.

This was due to the predominance of sovereigns and supranationals as sukuk issuers at 57 per cent among Fitch-rated sukuk, followed by financial institutions at 17 per cent.

The Federal Government of Nigeria (FGN) started the issuance of sukuk in September 2017, and has issued six Sovereign Sukuk bonds worth N1.1 trillion (approximately $657.6 million) to finance 124 federal road projects covering over 5,820 kilometres across the country’s six geopolitical zones.

Fitch rates over 70 per cent of the global outstanding dollar-denominated sukuk, with 81.3 per cent being investment-grade and 91.3 per cent of sukuk issuers maintaining Stable Outlooks.

There remains resolution uncertainty for both sukuk and bonds in many sukuk-issuing countries, due to the lack of precedents for default resolution and the still-developing nature of the debt capital markets.