Fundamentals, Not Speculation, Should Drive Investment Decisions — NGX

NGX Regulation Limited (NGX RegCo) has urged investors to anchor their trading decisions on company fundamentals rather than speculative momentum, following notable price movements in the shares of certain listed companies in recent trading sessions.

In an advisory issued as part of its routine market surveillance responsibilities, the independent regulatory arm of the Nigerian Exchange stressed the importance of informed and disciplined participation in the equities market, particularly during periods of heightened volatility.

NGX RegCo said it continues to monitor trading activities closely in line with its mandate to ensure a fair, orderly and transparent market.

The regulator emphasized that while price fluctuations are an inherent feature of capital markets, investment decisions should be guided by verifiable information, sound financial analysis and a clear understanding of associated risks.

“Our primary responsibility is to maintain a level playing field where market participants can trade with confidence, backed by timely and accurate information,” said Chief Executive Officer of NGX RegCo, Olufemi Shobanjo,.

“This advisory is a routine communication, reinforcing that sound fundamentals, not speculation, remain the foundation for sustainable investment outcomes. We are fully committed to preserving the integrity and stability of our market.”

The regulator advised investors to rely on publicly available disclosures, including audited financial statements, corporate filings and official announcements released through the Exchange.

It further encouraged market participants to conduct thorough due diligence, assess companies’ earnings capacity, governance standards and risk profile before committing capital.

NGX RegCo also cautioned against trading based on unverified information, rumours or social media-driven narratives, noting that such practices could expose investors to avoidable losses and undermine market confidence.

Investors were urged to seek guidance from licensed intermediaries, including stockbrokers and investment advisers, where necessary.

The advisory comes amid increased trading activity in select equities, which have recorded sharp price movements in recent sessions.

Although the regulator did not name specific companies, it reaffirmed that surveillance mechanisms remain active and responsive, with appropriate regulatory steps taken where necessary to safeguard market integrity.

NGX RegCo reiterated that the Nigerian Exchange remains stable, resilient and well-regulated, supported by robust oversight structures and transparent market operations.

It assured stakeholders that it would continue to deploy surveillance tools and regulatory interventions designed to promote investor protection and sustain confidence in the capital market.

Market analysts say such advisories serve as preventive regulatory measures aimed at reinforcing discipline, discouraging excessive speculation and ensuring that price discovery on the Exchange reflects underlying corporate performance rather than short-term trading momentum.