NIIRA 2025: Insurance Stocks Lead NGX N344Bn Gain in August

Insurance stocks led the performance on the floor of the Nigerian Exchange Limited (NGX), edging out other sectors as the market gained ₦344.61 billion in the just concluded month.

The performance of the sector was buoyed by investors’ reaction to the newly passed NIIRA 2025.

Overall stock performance

A review of stock market data by Pinnacle Daily shows that market capitalisation, which represents the total value of listed companies’ outstanding shares, rose by N344.61 billion, from N88.42 trillion it opened on Friday, August 1, to N88.77 trillion it closed on Friday, August 29.

Also, the All Share Index (ASI), which tracks the general market movement of all the listed equities on the NGX, rose from 139,863.52 points to 140,284.90 points.

The slight 0.4 per cent gain in market capitalisation and 0.30 per cent rise in ASI sustained the NGX bullish run.

Precisely in July, the stock market gained N12.5 trillion, representing a 14 per cent month-on-month growth as the total market capitalisation of listed equities rose from N75.951 trillion at the start of that month to N88.424 trillion at the end of the month.

The performance was largely buoyed by strong earnings results, increased foreign portfolio participation, and renewed confidence in key sectors, which resulted in considerable capital gains across the board.

Uptick in August buoyed by insurance stocks

In August, however, the Nigerian stock market recorded a very slight increase but sustained the bullish trend, largely buoyed by investors’ toast on insurance stocks.

Compared to other sectoral indices, the insurance index appreciated by 44.3 per cent from 889.53 basis points when it opened in August to 1,283.59 basis points when it closed, attesting to how market participants have welcomed the newly passed Nigerian Insurance Industry Reform Act (NIIRA) 2025.

The index has peaked at 1,616.47 points as of August 13, further reflecting investors’ appetite towards the stocks since the Act was signed into law.

NIIRA 2025 came into effect

Pinnacle Daily reports that President Bola Tinubu, on Tuesday, August 5, NIIRA 2025, sparked stronger investors’ confidence in insurance stocks.

The Act, which repeals and consolidates several outdated insurance laws into a single one, is aimed at strengthening the financial sector as Nigeria pushes toward achieving a $1 trillion economy by 2030.

Relative to the insurance index performance, the consumer goods index slightly rose by 8.91 per cent from 2,929.38 points to 3,190.51 points.

The industrial goods index appreciated from 4,885.21 points to 4,974.76 points, representing a 1.83 per cent increase.

In the negative territory, the banking index dropped by -5.09 per cent to 1,528.58 points from 1,610.53 points.

The oil and gas index followed in the red zone with a 3.95 per cent decline to 2,381.49 points from 2,479.47 points.

The commodity index, which is among the major sector indices tracked, dipped by 2.97 per cent to 1,066.84 points from 1,099.46 points.

Insurance stocks’ performance since January

A further review of month-by-month performances of the insurance index buttressed how investors’ sentiment swayed towards insurance stocks following the NIIRA 2025.

In January, the insurance index surged by 120.75 per cent to close at 710.08 points. In February it rose slightly by 0.87 per cent to 716.28 points. In March, it declined by −2.48 per cent, 698.54 points. In April, it dropped further by −3.52 per cent to 673.97 points.

In May, the insurance index rose by 1.60 per cent to 684.78 points and by 10.33 per cent to 755.52 points in June. It inched up by 17.74 to 889.53 points in July and significantly by 44.3 per cent to 1,283.59 in August.

Investors toast inch up insurance share prices

Investors’ toast towards insurance stocks pushed insurance share prices northward, including Guinea Insurance, Regency Assurance, AXA Mansard, Mutual Benefits and NEM Insurance, to record notable appreciation.

The uptick saw NEM Insurance share price appreciate by 30 per cent to N31.20, gaining N7.20; AIICO Insurance by 91.47 per cent to N4.04; and Mutual Benefit Assurance by 114.29 per cent to N3.90.

Outlook for September

In their weekly marketing review and outlook for the first trading week in September, analysts at Cowry Assets Management said, “We anticipate a mixed performance in the Nigerian equities market, with cautious sentiment likely to dominate amid tight liquidity and lingering macroeconomic pressures.”

“Sell pressure in the banking and industrial goods sectors may persist, while bargain-hunting in oversold counters, particularly within consumer goods and insurance, could drive mild recoveries.”

Overall, they expect that the market will trade range-bound with a slight bearish bias, barring any major policy pronouncements or corporate catalysts.