Nigerian equities posted a modest gain last week, rising by 0.3 percent amid reduced trading activity due to public holidays marking the Eid el-Adha celebration.
Despite the shortened trading window, the market maintained a positive trajectory, supported largely by renewed investor interest in oil and gas stocks. The benchmark index has now delivered an impressive year-to-date return of 60.9 percent, reflecting sustained bullish sentiment in the first five months of 2026.
Market analysts, however, note a gradual cooling in momentum. According to Meristem Securities, the 10-day Relative Strength Index (RSI) declined to 71.47 points from 78.93 in the previous week. While the market remains in overbought territory, the easing RSI suggests reduced overheating and the potential for fresh buying opportunities.
Against this backdrop, analysts have highlighted a selection of stocks with strong fundamentals and attractive valuations, offering investors a guide to strategic positioning in the current market environment.
Sterling Bank leads the list, supported by its solid financial metrics and relatively low valuation. The bank’s net profit ratio stands at 16.4 percent, while its price-to-earnings ratio of 5.1 times suggests the stock may be undervalued. Its RSI of 53.4 indicates moderate momentum without signs of overheating.
Coronation Insurance also features among the top picks, backed by stable fundamentals. The company reports a net profit ratio of 9.2 percent and a price-to-earnings ratio of 9 times, with an RSI of 49.3, suggesting a balanced position between buying and selling pressure.
Nascon Allied Industries has been selected for its strong profitability, with a net profit ratio of 22 percent. Although its price-to-earnings ratio of 17.7 times is higher than some peers, the company’s RSI of 66.1 reflects sustained investor interest.
In the energy sector, Aradel Holdings stands out with an impressive net profit ratio of 57.5 percent, underscoring its strong earnings capacity. The company’s price-to-earnings ratio is 21.5 times, while its RSI of 67.8 indicates continued bullish momentum.
MTN Nigeria also makes the list, supported by robust earnings performance. The telecommunications giant posts a net profit ratio of 23.7 percent and a price-to-earnings ratio of 12.9 times. Its RSI of 53.3 suggests stable market activity and room for further price movement.
While these stocks are identified based on analytical screening and fundamental strength, market participants are advised to approach investment decisions with caution. Analysts emphasize that these selections are intended as a guide rather than definitive buy, sell, or hold recommendations, urging investors to consider professional advice and broader market conditions before taking positions.
As the market enters a new trading week, attention will likely remain on sectors showing resilience, particularly oil and gas, alongside fundamentally strong equities capable of sustaining investor confidence.
