Stock Market Exceeds Analysts’ Expectation, Gains N8.42tn in Nine Months

Kayode Tokede

The Nigerian equities market has surpassed capital market analysts’ prediction this year, gaining about N8.42 trillion in market capitalisation backed by federal government foreign exchange unification and impressive corporate earnings by listed fundamental stocks.   

On the backdrop of significant growth in the stocks of Dangote Cement Plc, MTN Nigeria Communication Plc, Zenith Bank Plc, among others, the market capitalisation closed September 2023 at N36.381 trillion, gaining N8.42 trillion or 30.15 per cent from N27.915 trillion it opened for trading this year. 

With an average year-to-date return of 29.52 per cent, the NGX All-Share Index joined other Exchanges in Africa to become top five best behind, Zimbabwe Stock Exchange (540.18 per cent), Malawi Stock Exchange (90.90 per cent), Egyptian Exchange (38.19 per cent), and Ghana Stock Exchange (29.81 per cent).

Benchmark indices at the NGX closed September 2023 at 66,382.14 basis points from 51,251.06 basis points the stock market opened in 2023.

The benchmark index- which measures pricing trends at the stock market, had earlier exceeded its previous all-time high set in March 2008 to set a new record.

The All Share Index (ASI)- a value-based common index that tracks all share prices at the NGX, is widely regarded as Nigeria’s sovereign equities index, a barometer of pricing trends and investors’ return at the nation’s stock market.

The sectorial performance revealed that NGX Oil & gas index gained 97.63 per cent YtD, becoming the highest gainer, followed by NGX Consumer Goods Index that gained 92.28 per cent YtD.

The Banking Index and Insurance Index appreciated by 59.57 per cent and 62.31 per cent YtD, respectively.

In addition, the NGX 30-Index appreciated by 32.54 per cent YtD as NGX Industrial Goods Index gained 10.80 per cent.

Investors’ interest in Seplat Petroleum Plc, Conoil Plc, among others contributed to NGX Oil & gas Index, as Guaranty Trust Holding Company (GTCO), Zenith Bank, Stanbic IBTC Holding, among others drive the Banking Index.    

In the nine months under review, the stock price of Seplat Energy gained 67per cent to N1,837 per share, while Conoil appreciated to N80.20 per share, an increase of 202.6 per cent from N26.5 per share it closed for trading in 2022.

The likes of Zenith Bank and GTCO rose by 31 per cent and 50 per cent to N31.45 and 34.45 per share, respectively, while Stanbic IBTC Holdings appreciated to N78 per share, an increase of 133 per cent from N33.45 per share.

Dangote Cement, the most capitalised stock on NGX gained 30.3 per cent to N340 per share from N261 per share it closed in 2022, while stock price of MTN Nigeria increased to N264 per share from N215 per share.

Geregu Power also increased to N339.5 per share from N149 per share as BUA Foods       closed September 2023 at N202.8 per share, an increase of 212 per cent from N65 per share it closed for trading in 2022. 

There is analysts’ consensus at the stock market that the bullish trend witnessed in recent period was driven partly by positive investors’ perception of the pro-market administration of President Bola Tinubu.

The NGX stated that experts’ opinions on the strong performance of the market were that the bullish trend was due to “a combination of factors, including investor sentiment influenced by macroeconomic developments such as the formation and swearing-in of the economic cabinet by President Bola Tinubu”.

The Director General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, had said there was general optimism that ongoing reforms would rejuvenate the economy and lead to a brighter future for the country.

The NGX had also attributed the market performance to the “audacious macroeconomic reforms under the new administration” of Tinubu.

According to the NGX, market operators were of the view that “the policies of the new administration under President Bola Tinubu” had “led to the rise in the fortunes of investors”.

Afrinvest Securities had said “economy reform optimism” bolstered the market performance, noting that the “the rally in the market followed the promise of critical reforms by the President Bola Tinubu administration”.