NGX rally accelerates as banking stocks push index to eight-month high

Lenders led a broad advance after a softer inflation print revived bets on a pause in the tightening cycle.

Adaeze Okonkwo

Markets Editor5 min read

Nigerian equities closed at their highest level in eight months on Friday, with the banking sub-index doing the heavy lifting as investors rotated back into financials on the back of a more benign inflation reading.

What moved the market

The benchmark All-Share Index added 1.9 percent, extending a three-week run that has now recovered most of the ground lost earlier in the year. Volume was concentrated in a handful of tier-one lenders, whose valuations had drifted to levels that portfolio managers described as hard to ignore.

The market is repricing the end of the hiking cycle faster than the committee itself is signalling.
— A Lagos-based head of research at a local brokerage

Analysts cautioned that the rally remains narrow. Breadth improved only modestly, and the consumer-goods segment again lagged as input-cost pressures continued to weigh on margins.

Attention now turns to the next round of earnings, where investors will be looking for evidence that the improvement in funding costs is showing up on bank income statements.