How 15 Blue-chip Firms Contributed 79.98% of NGX’s N62.76trn MarketCap in 2024

Kayode Tokede

It has emerged that Dangote Cement Plc, Airtel Africa Plc and 13 other blue-chip stocks contributed about 79.98 per cent of the overall N62.76trillion market capitalisation of the Nigerian Exchange Limited (NGX) in 2024.

The remaining 13 blue-chip stocks that crossed the over N1 trillion mark in market capitalisation in 2024 were: BUA Foods Plc, BUA Cement Plc MTN Nigeria Communication Plc, Seplat Energy Plc, Lafarge Africa Plc and FBN Holdings Plc.

Others are:  Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Holding Company Plc (GTCO), Aradel Holdings Plc, Transcorp Hotels Plc, Geregu Power Plc and Transcorp Power Plc.

Dangote Cement, with a significant increase in its stock price led others as the most capitalised stock in 2024, followed by Airtel Africa.

THISDAY analysis of trading numbers showed that Dangote Cement gained 49.67 per cent to N478.80 per share from N319.9 per share it opened for trading closing 2024 with a market capitalisation of N8.16 trillion.

Impressive corporate earnings in 2024 contributed to the growth in Dangote Cement stock price last year. The cement maker had declared N406.39 billion profit before tax in nine months of 2024, representing an increase of 0.4 per cent from N404.89 billion declared in nine months of 2023. 

Overtime, the demand for Dangote Cement on the NGX impacted on the cement maker’s stock price to reach N763 per share in its 52-week high, making it the most capitalised company at N13 trillion. 

For Airtel Africa, the telecommunication giant listed on the NGX and London Stock Exchange (LSE), closed 2024 with a market capitalisation of N8.11 trillion. The N8.11 trillion market capitalisation of Airtel Africa was driven by its stock price that appreciated by 14.4 per cent to close December 31, 2024 at N2,156.90 per share from N1,887.00 per share it opened for trading.

Despite reporting a decline in profit in half year ended September 2024 results, capital market analysts have attributed increase in Airtel Africa stock price to its fundamentals.

Airtel Africa reported profit after tax of $31million in the half year ended September 2024, caused by $80 million of exceptional derivative and foreign exchange losses (net of tax), arising from the further depreciation in the Nigerian naira during the quarter.

“Airtel Africa’s strong operational performance, driven by customer growth, expanded network coverage, and increased mobile money penetration, was significantly impacted by sustained currency pressures, particularly in Nigeria, resulting in declines in both revenue and profit for the quarter,” said analysts at Cordros Securities.

The telco’s customer base increased by 6.1 per cent to 156.6 million, and data usage per customer increased by 30.9 per cent to 6.6 GBs. Smartphone penetration increased 5.3 per cent to 42.9 per cent. 

Further analysis revealed that BUA Foods recorded over N7 trillion market capitalisation. The stock price of BUA Foods increased to N415 per share, about 115 per cent gain in one year when compared to N193.4 per share the stock price opened for trading in 2024.

Despite losses, MTN Nigeria Communications market capitalisation closed 2024 at N4.2 trillion.  The telecommunication giant has maintained losses in its corporate earning, leading to investors sell-off its stock on NGX. The stock price of MTN Nigeria dipped by 24 per cent to close 2024 at N200 per share, about drop from N264.00 per share.

Seplat Energy, and BUA Cement are the only two companies with market capitalisation at N3.35 trillion and N3.15 trillion, respectively.  

As Seplat Energy’s stock price moved from N2,310 per share to N5,700 per share, that of BUA Cement dropped by 4.1 per cent to close 2024 at N93 per share from N97.00 per share it opened for trading in 2024.

Aradel Holdings, a new listed oil & gas company, Geregu Power and Transcorp Power closed 2024 financial year with market capitalisation of over N2 trillion.

The market capitalisation of Geregu Power, Transcorp Power and Aradel Holdings, closed 2024 at N2.88 trillion, N2.7 trillion and N2.68 trillion, respectively.   

In addition, six out of the 15 blue-chip stocks closed 2024 with over N1 trillion in market capitalisation.

They are: GTCO, N1.68 trillion; Zenith Bank, N1.43 trillion; Transcorp Hotel, N1.19 trillion; United Bank for Africa, N1.16 trillion; Lafarge Africa, N1.13trillion and FBN Holdings, N1.01 trillion.

Analysts believe Dangote Cement, Airtel Africa among others were able to sustain their market capitalisation due to their fundamentals that include dividend payout to shareholders and impressive corporate earnings.

Speaking, the Executive Vice Chairman of Highcap Securities Limited, Mr. David Adonri stated that one per cent gain/decline of these 15 companies tend swing the momentum of the stock market, as they are the major movers of the market capitalisation of over 140 quoted stocks on the Exchange.

He added that these 15 stocks defy current economy uncertainties in the country due to the prospect of a high yield environment come 2025. 

According to him, “Optimists also see strength in the market from the perspective of corporate fundamentals which remain strong despite macroeconomic frailties and assault from misfired public policies.”

Speaking on 2025 outlook, Adonri stated that, the positive impact of continuation of banking recapitalization and other anticipated public offerings will strengthen the primary market.

According to him, the refinancing embarked upon by some manufacturing companies and their recovery from FX losses are expected to facilitate growth further in dividend yield adding that, “There will be positive impact on equities should 2025 macroeconomic forecast of 15 per cent Inflation rate and Foreign Exchange rate of N1,500 per US Dollar materialise.

 “The enthusiasm of investors in participating in the banking recapitalization exercise is quite high. The exercise is also supported by a robust public offerings technology. With the boom in the secondary market and growing investors’ confidence in Nigeria, there is strong indication that the recapitalization exercise will be a huge success again in 2025.”

On the market outlook for 2025, analysts at Afrinvest in a report stated that, “Our prognosis for 2025 suggests a positive risk assessment amid various macroeconomic and market dynamics. On a base case, we anticipate a 30.4per cent gain from improved sentiment towards ongoing bank recapitalisation exercise, new listings and resilient corporate earnings and expectation of CBN’s monetary policy easing in H2 2025.”

On their part, analysts at CardinalStone Limited in its report titled, “2025 Economic Outlook; Pressure To Plateau,” said, “our outlook is positive for Nigerian equities, shaped by improving macro dynamics; emerging gains from ongoing corporate actions; growing interest from foreign investors; possible re-inclusion of Nigeria in the MSCI FM index; strategic balance sheet restructuring and deleveraging exercises; and cheap valuation.

“We adopt a top-down approach to delineate potential options for equity investors in 2025. Under our base case, we see growth, with the oil & gas and manufacturing sectors likely to be pivotal. Our 2025 sectoral allocation is pro-growth, with emphasis on upstream oil and gas, driven by recent developments under the Petroleum Industry Act (PIA). The year 2025 is likely to benefit from the impact of ongoing or completed corporate actions. We view the banking sector recapitalisation as a net positive in the near to medium despite concerns over short-term dilution effects.”

The research firm added that 2025 could see foreign participation rise to over 30.0 per cent as confidence remains on the rise, stemming from easy repatriation and the creation of the electronic FX system.

It noted that, “from our analysis, we expect the Nigerian equities market to return 40.4 per cent in 2025, marking the sixth consecutive positive annual gain. On a risk-adjusted basis, the market should return 15.6 per cent or an expected return per risk of 1.63x in 2025.”