Nigerian Stocks hit by June storm, bargain opportunities emerge

Last month was a brutal month for the Nigeria’s major stock market, marking the worst performance and steepest correction of the year after a prolonged bull run.

The NGX dropped 8.4% in June following six weeks of consistent gains, with widespread selloffs across many stocks – and we’re only in June! Investors lost over N13 trillion.

The most severe moment was Wednesday, June 24, which became the worst trading day in 2026 for Nigeria’s stock market. Over N3.64 trillion of market value vanished in June 24 as the All-Share Index (ASI) fell by 2.35%.

This decline was mainly caused by profit-taking in major stocks like Dangote Cement, BUA Cement, and Geregu Power all hitting the maximum daily loss limit. These stocks, due to their significant influence on the index, drove the Industrial Goods sector down by 8.30% within a day.

In addition, the decline wasn’t just due to typical quarter-end profit-taking; broader economic factors also drew capital away from equities. Treasury bill yields surged by 76%, as increased government borrowing strained liquidity and pushed yields higher.

Since these risk-free assets are highly attractive to institutional investors, many have moved their funds out of equities to capitalize on better returns in the debt market.

Even with the rather hefty correction, when viewed through a wider lens, you’ll find that this pullback is more of a classic “breather” rather than a breakdown:

The YTD performance is still an impressive +48% in local currency terms, in what might be the ultimate show of robustness, since the first half of the year was so exceptionally powerful (with market cap crossing the magic N160 trillion level in May).

Still Africa’s Leader and perhaps in a most remarkable feat of resilience, even having shed N10 trillion naira from its highest point, the NGX is the year-to-date (YTD) African #1 stock market performance from a US dollar perspective

Fundamental outlook

Latest Market activity show Nigerian stocks fundamentally rerated its valuations and came back to an oversold area, and markets might soon see whether institutional domestic funds take this opportunity to position them at an attractive discount entry level before the next set of earnings that will start coming out before Q2 this financial year.

The banking sector faced challenges from ongoing central bank recapitalization efforts and HoldCo adjustments. Stocks like FBNH, Access, and FCMB experienced declines, as investors reassessed bank valuations amid tighter liquidity.

However, analysts regard this dip as a healthy correction, providing attractive opportunities for top banking stocks that now appear undervalued.

With many of the banks to be restructured under the holding company framework in the aftermath of the 31st of March 2026, recapitalization drive by the Central Bank of Nigeria (CBN), although very profitable, some banks might also wish to preserve cash in support of growth, with H1 2026 interim dividend yields serving as highly sought-after benchmarks for the persistence of high yields.

Aradel and Seplat Energy are companies with stellar capital appreciation; even though their cash payoffs are gargantuan, their steep price appreciation makes for a small percentage yield. Hence, the rationale for total return plays rather than dividend plays.

Presco and Okomu will benefit from the dollar-referenced price on the products (palm oil) and therefore continue to show decent dollar yields.

Technical outlook

The NGX All-Share Index (ASI) ended June 2026 near an uncertain support level of 228,321 after a sharp decline. Having lost over 7.4% from early-month highs, the index’s technical levels are now clearer.

Immediate support is expected to be around 227,500-228,000 levels, confirmed by the low point of 227,827.56 on June 29, which marked the peak of the recent declines.

If the index falls further, a major psychological support at 225,000 could come into play, based on historical accumulation zones before prices surged above 250,000.

Looking ahead to July, initial resistance levels are around 232,000 to 233,500, where previous consolidations occurred on June 25-26.

These levels will be tested as the market attempts a relief rally. Traders should watch the RSI on the daily chart, as the index is approaching oversold territory following declines driven by major stocks like Dangote and BUA.

This may encourage corporate investors to buy undervalued stocks ahead of the Q2 earnings season.