Equities rally may moderate as investors begin profit-taking

By Chukwuma Umeorah

The Nigerian equities market may be entering a phase of slower gains as investors increasingly lock in profits following a sustained rally that has pushed key performance indicators to elevated levels.

Market data for the week ended April 24, 2026 showed that the benchmark All-Share Index rose by 3.94 per cent to close at 225,722.49 points, while market capitalisation increased to N145.34 trillion, extending the year-to-date (YTD) return to 45.05 per cent.

Analysts said the pace of the advance, supported by strong liquidity and sustained demand for large- and mid-cap stocks, is beginning to show early signs of moderation as valuation levels rise and investors rebalance portfolios.

Cowry Asset Management in their weekly review noted stated that “the pace of gains may begin to moderate as investors increasingly lock in profits, particularly in stocks that have recorded significant price appreciation.”

The firm added that while momentum indicators remain positive, “some are approaching overbought levels as an early signal that the market may be nearing a short-term peak,” suggesting the possibility of a consolidation phase.

Trading activity remained firm, with a total of 3.805 billion shares valued at N213.96 billion exchanged in 297,202 deals during the week, reflecting improved liquidity and continued investor participation.

However, market breadth showed mixed signals. While 46 equities recorded price appreciation, 53 declined, indicating a rise in profit-taking activity compared to the previous week when gainers outpaced losers.

Sectoral performance remained broadly positive, with the Industrial Goods and Banking indices leading gains, supported by sustained demand for bellwether stocks. The Banking index advanced by 6.81 per cent, while the Consumer Goods index rose by 5.56 per cent, reflecting continued interest in fundamentally strong counters.

Market activity was largely driven by financial stocks, with Access Holdings Plc, United Bank for Africa Plc and FirstHoldCo Plc accounting for a significant share of total turnover, underscoring the dominance of the banking sector in current trading patterns.

Further analysis of market structure shows that domestic investors continue to underpin the rally. Data indicated that domestic participation accounted for 86.9 per cent of total transactions in the first quarter of 2026, highlighting the limited role of foreign investors despite a marginal rebound in March.

Within the domestic segment, institutional investors remained the primary drivers of activity, accounting for a larger share of transactions, a trend analysts say supports market stability but may also contribute to more selective buying patterns going forward.

In individual stock performance, UACN Plc gained 42.0 per cent to close at N142.00 per share, followed by Union Dicon Salt Plc which rose by 32.7 per cent to N21.90 per share. NASCON Allied Industries Plc appreciated by 32.6 per cent to close at N206.90 per share, while Trans-Nationwide Express Plc increased by 30.6 per cent to N7.90 per share. Zichis Agro-Allied Industries Plc also gained 25.7 per cent to close at N15.60 per share.

On the downside, Abbey Mortgage Bank Plc declined by 33.3 per cent to close at N5.40 per share, followed by Guinea Insurance Plc which fell by 15.2 per cent to N1.06 per share. Stanbic IBTC Holdings Plc dropped by 13.8 per cent to N162.50 per share, while LivingTrust Mortgage Bank Plc shed 11.0 per cent to close at N3.65 per share. Sovereign Trust Insurance Plc also decreased by 10.1 per cent to N1.95 per share.

Analysts expect the market to maintain a generally positive tone in the near term, supported by liquidity conditions and institutional participation, but with a shift toward selective positioning as investors focus on stocks with stronger earnings fundamentals and moderate valuations.