The President and Chairman of the Council, Chartered Institute of Stockbrokers, Oluropo Dada, has attributed the ongoing rally on the Nigerian Exchange to a confluence of macroeconomic stability, improved corporate earnings, and renewed investor confidence.
In a statement made available to The PUNCH on Sunday, Dada highlighted the Central Bank of Nigeria’s sustained efforts at stabilising the foreign exchange market and tightening monetary policies as key to the market’s current momentum.
“The apex bank has made significant progress in clearing forward backlogs and adopted tighter monetary measures that have helped stabilise the naira,” he said.
He also pointed to the impact of foreign portfolio inflows, which have been encouraged by undervalued equities and improving economic indicators.
“There is improved liquidity in the forex market, and the naira is relatively stable. Many blue-chip firms, especially in the banking, telecoms, and consumer goods sectors, posted robust first quarter 2025 earnings on the back of forex gains and cost optimisation,” Dada added.
Dada also acknowledged the growing participation of domestic institutional investors, particularly pension fund administrators, who are reallocating capital into equities to capture long-term value opportunities.
“The NGX rally is underpinned by structural reforms, stronger earnings, forex market improvements, and strategic asset reallocation. Barring external shocks, the momentum is likely to persist. However, we cannot rule out short-term corrections from profit-taking or policy risks, as the market has a self-correction mechanism,” he said.
He explained that the sustainability of the rally will depend on the consistent execution of macroeconomic reforms, sustained earnings growth and continued foreign exchange stability.
Dada further advised investors to remain grounded in fundamentals and adopt disciplined accumulation strategies while warning of potential risks such as policy reversals, inflationary pressures, and political uncertainties.
He said, “Investors must be cautious. Nigeria remains a high-beta market. While the outlook is cautiously optimistic in the medium term, it remains highly sensitive to execution and external shocks.”
On diversification, the CIS president urged investors to spread their assets across equities, fixed income, commodities, and foreign-denominated instruments while rebalancing portfolios regularly to minimise exposure.
He also identified sectors such as consumer staples, healthcare, telecommunications, agriculture and large-cap banks as more resilient during market downturns due to their essential nature and consistent demand.
“Products of companies like Nestlé Nigeria, Unilever, Dangote Sugar, and Honeywell Flour are always in demand. Similarly, firms like May & Baker and MTN maintain strong cash flows regardless of the economic cycle,” he said.
He warned that overstretched valuations, policy inconsistencies, and disappointing earnings could trigger market corrections, urging investors to monitor macroeconomic data, interest rate trends, and the CBN’s policy direction closely.
“The current rally is fundamentally supported, but it is also sentiment-driven. “Take profits, rebalance portfolios, and consult your stockbroker before making any investment decisions,” he advised.
The PUNCH reported that the President and Chairman of the Council of the Chartered Institute of Stockbrokers, Oluropo Dada, alongside the Institute’s first Vice President, Fiona Ahimie, has reiterated the crucial role of stockbrokers in driving Nigeria’s economic growth and financial stability.
