The naira extended its rally this week, gaining 1.48 per cent in the parallel market to close around N1,488/$, as improved foreign exchange (FX) inflows and a softer U.S. dollar helped to firm the local currency.
At the official window, the currency also appreciated by 1.02 per cent to N1,465.68/$, reflecting renewed confidence and stronger market liquidity.
The appreciation was largely driven by increased foreign exchange inflows, which helped ease demand pressure across market segments.
Key contributors to the strengthening include higher oil receipts, steady diaspora remittances and renewed interest in the local economy by foreign portfolio investors.
A softer U.S. dollar, following weaker-than-expected economic data, has also supported the naira’s gains as it improves the relative attractiveness of emerging market currencies. Nigeria’s external reserves also recorded an uptick, rising by 0.21 per cent week-on-week to $42.35 billion.
The naira uptrend comes with some concern as global oil markets face fresh headwinds. Brent crude dropped by 8.3 per cent week-to-date to $64.53 per barrel, while West Texas Intermediate (WTI) fell by 7.6 per cent to $60.86 per barrel – both marking their sharpest monthly declines in four months.
The bearish trend was fueled by growing concerns that OPEC+ may proceed with plans to boost production at the next meeting, potentially exacerbating an already fragile supply-demand balance.
Meanwhile, the Nigerian equities market extended its positive momentum last week, with sentiment remaining broadly bullish as investors’ wealth rose significantly by N1.18 trillion.
At the close of transactions last week, the NGX all-share index gained 1.02 per cent to close at 143,584.04 points. Market capitalisation also rose by 1.31per cent to N91.14 trillion.
The upturn was driven in part by the listing of 14.14 billion ordinary shares of Wema Bank Plc (50 kobo each) on September 30, 2025, in addition to renewed investor appetite in blue-chip stocks. Further affirming the market’s positive tone, market breadth closed in the green at 1.23x, with 53 stocks recording gains against 43 decliners.
This suggests a cautiously optimistic environment, where investors remain selective but confident in the broader market outlook. The prevailing sentiment has been shaped by strong sectoral performance and improved participation, particularly from retail and mid-tier investors. While the overall market direction remained positive, trading activity showed a mixed picture. The number of deals executed during the week edged down slightly by 0.72 per cent to 115,870, signaling a marginal dip in market engagement.
More notably, the total value of transactions fell sharply by 76.62 per cent to N115.52 billion, largely due to a decline in block trades, which had previously contributed significantly to market turnover.
Despite the drop in transaction value, traded volumes rose by 9.35% to 8.40 billion units, suggesting increased activity from smaller investors and mid-sized institutional players.
This uptick in volume points to a broadening base of participation and may signal a more inclusive market structure moving forward. Sectoral performance remained largely positive, with five of the six major indices closing higher. This broad-based strength reinforces the underlying confidence in Nigeria’s macroeconomic and corporate fundamentals, as investors continue to respond favorably to earnings expectations, stable policy signals, and attractive valuations across key sectors.
The oil and gas index emerged as the top sectoral gainer after advancing by 5.68 per cent. It was followed by notable gains in the commodities sector, which rose by 2.94 per cent, while industrial goods added 1.66 per cent, banking climbed 1.17 per cent, and consumer goods inched up by 0.13 per cent. The insurance index was the only laggard, shedding 2.02 per cent amid profit-taking activities and waning investor sentiment in selected stocks.
Among individual stock performances, Eterna Nigeria led the weekly gainers’ chart with an impressive 32.8 per cent rise. It was closely followed by Enamelwa and PZ Cussons, both recording a 20.9 per cent increase. Livingtrust rose by 18.3per cent, while Eunisell posted a gain of 17.6 per cent, reflecting strong investor interest in these counters.
On the flip side, Julius Berger recorded the steepest decline of the week, falling by 17.8 per cent as cautious sentiment weighed on the stock. Other notable laggards included Intenegins, down 11.1 per cent, Union Dicon and Mansard, both declining by 10 per cent and UPL, which slipped 9.8 per cent, as investors turned defensive considering recent volatility in select sectors.
According to analysts at Cowry Asset Management Limited, the strong performance recorded so far this year, combined with broad-based sectoral gains and increasing retail investor participation, continues to provide a solid foundation for market stability. While the current bullish momentum remains intact, Cowry Asset noted that intermittent profit-taking and a potential slowdown in block trades could introduce short-term fluctuations in trading activity.
