The 2026 pension effect isn’t just lifting the big banks; it is flowing into specific, fundamentally sound tickers that Pension Fund Administrators (PFAs) previously avoided due to tight investment limits.

On Wednesday, part of the over N27.45 trillion pension fund assets found their way into stocks like Nestle Nigeria Plc, Julius Berger Nigeria Plc, and Transcorp Hotels Plc – the major advancers that caused the market’s rally by 0.78 percent or approximately N970billion. Forty-nine (49) stocks gained against 32 losers, signalling increased buy activities on the Lagos Bourse.

“Investors should monitor the Pension Index as it often signals where long-term institutional ‘sticky’ capital is moving,” according to Lagos-based Vetiva research analysts in their recent note.

With inflation still a factor, PFAs are aggressively moving capital into “Variable Income Instruments” (equities) like Nestle to capture real returns that fixed-income assets can no longer provide. Also, Julius Berger recently reported a strong 2025 revenue, signalling a robust recovery in the construction sector. This has triggered a strong buy sentiment among institutional investors.

The All-Share Index (ASI) recently shattered the 170,000-point ceiling, a historic high that has turned the Lagos bourse into one of the best-performing markets globally this year. On Wednesday, the stock market’s value and performance index furthered their rally to N114.377trillion and 178,184.54 points from the preceding day’s 113.496trillion and 176,809.43 points.

Likewise, the Pension Index also edged higher to 8,465.55 points from the preceding day’s 8,351.50 points. The market’s new high has pushed return’s year-to-date (YtD) to 14.50 percent.

PenCom recently revised the investment limits for ordinary shares in RSA Funds I, II, III and VI-Active, reflecting the need to address implementation challenges associated with the Revised Regulation on Investment of Pension Fund Assets published in September 2025.

Blue-chip heavyweights like Nestle Nigeria and Julius Berger, plus stocks like Transcorp Hotel, MTNN, GTCO became primary targets for Pension Fund Administrators (PFAs) who looked to rebalance their portfolios in line with the new investment limits.

Nestle Nigeria share price rose by 10 percent, from N2,200 to N2,420, adding N220. Julius Berger also rose from N230.80 to N249.70, adding N18.90 or 8.19 percent.

The stock market Is shifting from indiscriminate rallies to selective, earnings-driven growth. Pension funds are no longer just safe haven seekers, but are now active market movers.

Transcorp Hotels, another major advancer, rose from N174.50 to N190.90, up by N16.40 or 9.40 percent. MTN N advanced from N643 to N650, gaining N7 or 1.09 percent, while the share price of GTCO, another hunted stock, rose from N101 to N106, adding N5 or 4.95 percent.

According to CardinalStone Research analysts in their February 11 note, the Pencom adjusted limits introduced a new catalyst for the equities market, with “PFAs likely to leverage the rule to properly optimise positions in fundamentally sound tickers.

Meanwhile, in their positive outlook for the month, CardinalStone Research analysts expect investors’ attention to shift towards recently released earnings “as some position ahead of the upcoming FY’25 final dividends”.

“Looking ahead, we will continue to track earnings releases from portfolio constituents and reassess positions in the context of valuations and prevailing market sentiment, with a view to rebalancing the portfolio where necessary,” according to Coronation Research analysts in their February 9 Model Equity Portfolio (MEP). (BusinessDay)