The Nigerian Exchange (NGX) closed the first half of 2025 with mixed results across its sectoral indices, reflecting shifting investor sentiment, evolving macroeconomic dynamics, and global market trends.
Tne of the strongest performers was the NGX Pension Index, which returned a remarkable 28.26% year-to-date (YTD) as at the end of June 2025. This impressive performance was fueled by sustained accumulation by pension fund administrators into dividend-paying, fundamentally sound blue-chip stocks. The preference for stability and long-term value among institutional investors underpinned the index’s steady rise, with equities in consumer goods, telecommunications, and select banking tickers forming the core of these portfolios.
Analysts believe that pension funds’ cautious but deliberate strategy — favoring stocks with strong cash flow, low volatility, and reliable dividend history — served as a buffer against market-wide turbulence during the first half of the year. This accumulation trend has also played a stabilizing role for the broader equities market, absorbing selling pressure during volatile periods.
In contrast, the NGX Insurance Index posted a modest 5.23% gain, reflecting tempered investor appetite toward the sector. Regulatory pressures, weak premium growth, and delayed recapitalisation efforts have continued to dampen enthusiasm, despite pockets of optimism driven by technology adoption and industry consolidation moves.
Meanwhile, the NGX Oil and Gas Index was the worst performer in H1 2025, declining 10.12% YTD. The index’s downward trajectory was driven by a combination of global oil price fluctuations, capital expenditure constraints, and lingering uncertainty over Nigeria’s downstream reforms. Investors also remained cautious due to muted output growth, foreign exchange volatility, and the slow pace of deregulation in petroleum pricing.
Market watchers say that while the recent decline in pump prices and the resurgence of domestic refining may eventually reposition energy stocks for a rebound, the sector’s first-half performance was marred by weak earnings visibility and operational challenges.
Across the broader market, investor sentiment remained cautious, with many retail and institutional participants opting to rebalance portfolios in favour of defensive and high-yield stocks. The Proshare Index, which tracks weighted price performance, mirrored this defensive stance, indicating limited risk appetite amid inflationary pressures, regulatory shifts, and monetary policy tightening.
As the second half of 2025 begins, all eyes are on key macroeconomic indicators — including inflation trends, interest rate direction, global commodity price movement, and Central Bank policy clarity — to shape the trajectory of Nigeria’s capital markets. Analysts believe that improved corporate earnings in Q2 and consistent policy signals will be crucial in either sustaining or reversing momentum across major indices.
