- The equities market recovered in September, rising 4.0% month-on-month (m/m) to close at 251,211.67 points, reversing the 1.6% m/m loss in August. The upturn in the market was driven largely by renewed bargain hunting after the prior month’s sell-off, supported by improved investor sentiment reinforced by FTSE Russell’s reinstatement of Nigeria to Frontier Market status from 21 September. Sector performance was mixed, with the Oil and Gas sector gaining approximately 18.9% m/m, supported by buying interest in SEPLAT (+29.9%), ETERNA (+22.9%), and ARADEL (+8.1%). In contrast, the Consumer Goods and Insurance and sectors declined by approximately 0.6% and 0.2% m/m, respectively.
- Market breadth improved significantly in September, rising to 0.86x from 0.22x in August, signalling a notable recovery in investor sentiment, as 49 stocks advanced compared to 57 decliners (previously: 19 advancers and 88 decliners). The still-narrow breadth suggests gains were concentrated in select names, likely consistent with FTSE-related positioning, and the Dangote IPO that may also have diverted some liquidity from the broader secondary market. Consequently, the market’s year-to-date (YTD) return increased to approximately 61.4% in September from 55.2% in August.
- Trading activity declined in volume terms, while value traded strengthened. Average daily volume fell by 39.4% m/m to approximately 789.9mn units in September, reflecting slower activity despite the broader market advance. Conversely, average daily value traded rose by 30.4% m/m to approximately ₦39.8bn, suggesting that activity was concentrated in relatively large-value transactions.
- Overall, September trading was characterised by buying interest in large-cap stocks and stronger market breadth, resulting in a notable market gain supported primarily by strong gains in Oil and Gas counters. The decline in average traded volume alongside the increase in average traded value points to improved investor appetite for large-cap names. The macro backdrop was also supportive: headline inflation eased to 15.39% year-on-year in August, and the CBN’s rate reset by a surprising 350bps likely supported this by lowering the relative appeal for fixed income securities.
October 2026 market prospects
- The equities market is expected to sustain a positive but more measured momentum in October, following the 4.0% m/m gain recorded in September. With Nigeria’s reinstatement into the FTSE Russell Frontier Market Index now effective, we expect the associated rebalancing flows to gradually normalise, while investors reassess positions following the recent rally. Attention is likely to remain concentrated on large-cap stocks with strong earnings visibility and sufficient liquidity.
- The easing interest-rate environment should continue to support equities, as the CBN’s recent 350bps rate cut reduces the relative attractiveness of fixed-income assets and potentially encourages portfolio reallocation towards risk assets. Lower yields could also support valuation multiples, although the pace of further monetary easing and its impact on liquidity conditions will remain important determinants of market direction.
- Overall, we expect the NGX to maintain a cautiously positive bias in October, supported by the improved interest in large-cap stocks, a more favourable interest-rate environment and continued rotation into fundamentally attractive counters. However, the market’s elevated YTD gains and relatively narrow breadth suggest that intermittent profit-taking and increased stock-level differentiation are likely to persist.
October 2026 Top 10 Stock Picks
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