NGX Up 61.43% in Nine Months, but Stretched Valuations May Test Q4 Gains

The Nigerian Exchange All-Share Index has risen 61.43% in the first nine months of 2026, putting the market on course for a record run. But the rally has been narrow, and investors entering Q4 may need to be far more selective.

Oil and gas, banking and industrial stocks did most of the heavy lifting between January and September. Consumer goods and insurance lagged. The same pattern held in Q3, when Airtel Africa, FirstHoldCo, Seplat and MTN Nigeria added the most market value while other large companies lost ground.

Where the gains came from

Oil and Gas was the strongest major sector, up 133.94% year to date, with Seplat Energy up 175.44% and Aradel Holdings up 128.36%. Industrial goods rose 83.92% YtD. HBM gained 163.94%, Dangote Cement 75.16% and BUA Cement 66.39%. Beta Glass was a standout, rising several-fold before pulling back in September.

Banking gained 78.92% YtD, driven by FirstHoldCo (+233.82%) and Zenith Bank (+116.83%). Consumer goods managed only 2.08%. Nestle rose 48.11%, but BUA Foods fell 4.79% and International Breweries dropped 31.79%. Insurance was the weakest major sector, down 8.59% YtD, as declines in larger names outweighed sharp gains among smaller insurers.

Q3 winners and losers

Among companies worth at least N1 trillion, combined market capitalisation rose by about N15.25 trillion between June and September, but a handful of stocks accounted for most of it.

Airtel Africa added about N5.66 trillion in Q3, FirstHoldCo N4.72 trillion, Seplat Energy N2.78 trillion and MTN Nigeria N2.56 trillion. Dangote Cement and Zenith Bank also recorded strong increases. On the losing side, BUA Foods shed about N3.21 trillion, BUA Cement lost N1.46 trillion, while Transcorp Power and ETI each lost about half a trillion naira.

What to watch in Q4

With the MPR at 23%, lower fixed-income yields could make equities more attractive and ease borrowing costs for companies weighed down by expensive financing. Futureview Securities flagged Dangote Cement and BUA Cement as possible beneficiaries. BUA Foods, Dangote Sugar, Nestle, Champion Breweries and MTN Nigeria could also gain if financing costs ease and demand improves. Banks including Zenith, GTCO, UBA and Access Holdings may see stronger loan demand, though falling yields could cut income from government securities.

Nigeria's return to FTSE Russell's Frontier Market universe puts FirstHoldCo, Zenith Bank, GTCO, Dangote Cement, MTN Nigeria and Aradel in the Frontier 50. That does not guarantee inflows, but it makes the stocks easier for global frontier funds to track and potentially own.

The expected listing of Dangote Petroleum Refinery is another catalyst. The IPO has already pulled liquidity from the market, and a listing of that size could bring new investors and trading activity to the NGX, with capital market firms such as NGX Group among the likely beneficiaries. Existing large caps in banking, telecoms and cement could face short-term portfolio rebalancing as institutions make room, creating competition for the same pool of investable cash.

A late-September review of six brokerage houses still found broad positive support for UBA, Access Holdings, ETI, FCMB, GTCO and Zenith Bank.

What it means for the market

After a 61.43% rally, the market enters Q4 from a much higher base. A company can stay fundamentally strong and still offer limited upside if its share price has run far ahead of profits. The more interesting Q4 names may not be the year's biggest winners.