Stock Market Posts Best Return in Africa as Investors Gained N1.83tn in May

Kayode Tokede

Despite the soaring inflation and weak indices in the economy, the Nigerian equities market posted impressive performance as the market capitalization increased by N1.833 trillion to close at N30.366 trillion – the first time since March 2023.

Also, the All Share Index oe ASI which shoaws  the direction of equity prices recorded a month-to-date gain of 6.4 per cent at the end of May 2023, out-shining its peers in Sub-Saharan Africa (SSA).

Analysis of market data obtained from the NGX’s website showed that the NGX All Share Index which opened May at 52,403.51 basis points, close the month at 55,769.28 basis points, rising by 6.42 per cent.

The market had declined by 1.9 per cent and 0.8 per cent in March and April respectively amid profit-taking by investors, uncertainties during the build-up of the February elections as well as rising inflation.

The gain according to market operators was due to President Bola Tinubu’s inauguration speech. Tinubu had stated that his administration will move to remove the fuel subsidy as well as work on unifying exchange rates.

He also stated that his administration will be targeting a higher GDP growth, create jobs, work towards a unified exchange rate and ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home.

In comparison with other markets in Sub-Saharan Africa, Nigeria outperformed South Africa, Ghana, and Egypt in year to date May 2023.

For example, South Africa’s FTSE/JSE All Share Index gained 3.2 per cent, Ghana’s GSE Composite Index gained 2.76 per cent while Kenya’s lost 18.66 per cent in the same period.

Further analysis of the market performance revealed that the market turnover increased by 10 per cent as investors staked N130 billion in 12.8 billion shares which exchanged hands in 217,72 deals in the month under review as against N118 billion which was staked in 11.6 billion in 189,007 deals in the previous trading month (April 2023).

Reacting to the performance of the market, analysts noted that while the bullish sentiments, as well as the inauguration of President Bola Tinubu, have provided a boost to investor confidence, investors will still take a cautious approach to trading with an eye on how well the new administration’s policies will be swiftly implemented.

Chief Executive Officer, Crane Securities, Mike Eze said that the gain was expected owing to the speech made by the President.

“The issues mentioned by the President have been the issues boggling the economy and so when he made those remarks, investors reacted positively to it. However, by next week, investors would trade cautiously to see how well the policies of the new administration will be swiftly implemented, “he said.