As of August 2025, your N1 million guess on Nigeria’s penny shares at the beginning of the 12 months may have doubled and even quintupled.
Mutual Advantages Assurance, ABC Transport, Sensible Merchandise, AIICO Insurance coverage, McNichols Plc, Sovereign Belief Insurance coverage, and Royal Alternate all delivered good points that turned N1 million into between N2 million and N5 million.
Of the 43 low-priced shares buying and selling below N5, 29 have outpaced inflation, delivering actual returns.
As well as, 26 of them outperformed the broad market index (ASI), which returned 36% YtD as of August 2025. The index closed at 140,295.50 factors, up from 102,926.40 originally of the 12 months
The enchantment of penny shares lies of their affordability. Their low entry worth makes them accessible to small retail buyers at a time when inflation is squeezing buying energy and blue-chip shares are shifting out of attain.
On this sense, these “tiny tickers” present that small cash can nonetheless dream large.
Digital sub-brokers and buying and selling apps have additional lowered the barrier.
Right now, anybody with a smartphone and as little as N100 should buy into the NGX. A N5,000 stake can fetch hundreds of items, creating a brand new technology of youthful, tech-savvy buyers preferring buying and selling from their telephones.
This development is reshaping market participation and will function a wake-up name to conventional brokers but to totally migrate on-line.
However the dangers stay simply as actual. Skinny liquidity, restricted analyst protection, and sharp worth swings are inherent dangers.
That’s why fundamentals matter. It is very important look at whether or not a rally aligns with an organization’s monetary efficiency. With out that, buyers could also be using on sentiment alone.
Liquidity is one other key issue; with out sufficient quantity, getting in or out of a place might be tough.
As we enter September, this mixture of affordability, digital entry, and up to date efficiency makes penny shares a tempting possibility as soon as once more.
For buyers with a robust danger urge for food, they might show to be one other unlikely supply of sturdy returns. However it pays to separate the stable names from the speculative hype.
A few of them, particularly in insurance coverage, are proving that their rallies should not simply sentiment-driven.
- Mutual Advantages Assurance stays the perfect performer, with a 485% achieve as of yesterday. Additionally it is liquid (fifteenth most traded) and worthwhile, with H1 2025 earnings up 374%.
- Common Insurance coverage is up 89% YtD and ranks most liquid among the many penny shares and threerd most liquid on the NGX. Its 2024 audited outcomes present the corporate is worthwhile. So, it seems to be a great guess.
- Linkage Assurance and AIICO Insurance coverage additionally supply a mix of liquidity, affordability, and profitability, making them standout names.
However, not all penny inventory rallies inform the identical story.
- Chams Holdings and Regency Alliance have seen sturdy worth strikes and lively buying and selling however reported revenue declines of their newest outcomes.
- Sensible Merchandise Nigeria has gained 260% YtD, however with solely 748 million shares traded in three months, it ranks among the many least liquid penny shares and the 128th most traded shares on NGX. Worse nonetheless, it stays unprofitable, elevating questions on how sustainable the rally is.
The lesson is obvious: penny shares can ship sturdy good points, however with out liquidity and fundamentals, the dangers are magnified.
Heading into September, buyers ought to concentrate on names that mix affordability with buying and selling exercise, profitability and dividends.
Common, Mutual Advantages, Linkage, and AIICO match that profile, however warning stays the rule of the sport.
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