Nigeria’s stock market rose last week as a surge in global oil prices, triggered by escalating tensions in the Middle East, boosted investor appetite for energy stocks and lifted the broader market.
The benchmark NGX All Share Index climbed 2.1% week-on-week to 196,968.15 points, extending its year-to-date gain to 26.6%. Market capitalisation also rose to ₦126.4 trillion.
Energy stocks led the rally, with the oil and gas index jumping 9.4%, the strongest sector performance during the week. The gains were driven largely by price increases in key energy companies including Aradel Holdings, which surged 20.0%, and Oando, which rose 18.9%.
The rally came as crude oil prices spiked globally after a military conflict between the United States and Israel against Iran raised fears of supply disruptions in the Middle East. Brent crude rose nearly 25% week-on-week to about $91.10 per barrel, its biggest weekly rally in five years, as tanker movements through the Strait of Hormuz were halted and several refineries in the region shut down.
Because the strait carries roughly 20%–30% of the world’s daily oil supply, any disruption tends to tighten global markets and push prices higher.
The surge in oil prices helped improve the outlook for energy companies listed on the Nigerian exchange and encouraged fresh buying by investors.
“By the end of the week, the market was up 2.0% compared to last week. Renewed buying interest helped push stocks higher,” Afrinvest said in its report.
Other sectors also posted gains. The industrial goods index rose 3.9%, supported by advances in cement producers including Dangote Cement, while the ICT index gained 2.5% as telecom giant MTN Nigeria climbed 3.9%. Banking stocks edged slightly higher, with the sector index up 0.2%.
“Investors are watching how elevated oil prices could impact earnings amid the ongoing US–Iran tensions,” investment firm Afrinvest Securities Limited wrote in its weekly report.
Slowed Trading
Despite the bullish market performance, overall trading activity slowed. Average trading volume fell 32.7% week-on-week to 739 million shares, while the total value of trades declined 9.9% to ₦35.5 billion.
The most actively traded stocks by volume were Jaiz Bank, Access Holdings, and Zenith Bank, while the largest trades by value were recorded in Aradel, MTN Nigeria, and GTCO.
The market’s resilience stood in contrast to global equity markets, which broadly declined amid rising geopolitical risks and inflation concerns linked to higher energy prices.
However, the oil price rally has also exposed structural weaknesses in Nigeria’s economy. While higher crude prices typically boost government revenues, the country’s oil production has remained below its budget benchmark, limiting potential windfall gains from the price spike.
Afrinvest noted that unless Nigeria addresses production constraints and supply bottlenecks in the upstream sector, the country may once again struggle to convert favourable oil prices into significant fiscal benefits.
Discover more from Pluboard
Subscribe to get the latest posts sent to your email.