Lagos, July 3, 2023 – Equity investors on the Nigerian Exchange (NGX) gained N5.3 trillion in the first six half (H1) of 2023 due to macroeconomic reforms by the new administration.
A statement by the NGX at the weekend said the development was in spite of the rising inflation, social unrest, global uncertainty and other economic challenges which had impacted on the market during the early part of the first half of the year.
The market, however, rallied in the part of the first half of the year due to rekindled interest from investors, especially in bell whether stocks.
The NGX All Share Index (ASI), which measures the performance of listed firms, hit a 15-year high for the first time since 2008 and crossed 60,000 index points to close at 60,968.27 points.
This was against an opening value of 51,251.06 (January 3, 2023), implying an increase of 8,717.21 or 18.96 per cent.
Similarly, the market capitalisation of listed companies, which opened the year at N27.915 trillion, closed on Friday, June 30 at N33.197 trillion, representing a gain of N5.3 trillion in six months (H1) of 2023.
Some operators attributed the market performance during the period to the policies of the new administration of President Bola Tinubu.
They listed the policies to include the harmonisation of different exchange rates and the floating of the naira exchange rate at the Investors and Exporters window which had led to the rise in the fortunes of investors.
They recalled the persistent cash crunch that soaring inflation and uncertainties in the period to the build-up to the 2023 elections, which they said, dampened the mood of investors.
They said market sentiments started improving as the cash crunch eased and impressive corporate results came in.
Charles Fakrogha, the Chief Relationship Officer at Foresight Securities and Investments Limited, said the smooth transition of power alongside bold reforms of the new government led to the rise in market capitalisation.
He said the huge volumes of shares traded recently was an indication that foreign investors might be thinking of a comeback into the equities market.
“Investors were uncertain about the elections in February and we saw that the naira redesign implementation flopped badly. Then interest rates were continuously raised by the Central Bank of Nigeria (CBN).
“Inflation was actually on the minds of investors, but again we saw the smooth transition as well as bold policy statements from President Tinubu on May 29.
“This led to the gains and positive sentiments the market is currently experiencing,” he said.
Fakrogha advised the new administration to establish a cabinet and forge ahead with its plans for the nation as this will stimulate activities in various sectors of the economy and revive the capital market.
Mr Temi Popoola, the Chief Executive of NGX, said NGX was making efforts to collaborate with the new administration to develop the right policies that would steer market development and drive more listings.
“We are looking to collaborate with the new administration to develop the right policies that promote listings in our market with the support of stakeholders like the Chartered Institute of Stockbrokers (CIS), Association of Securities Dealing Houses of Nigeria (ASHON), Association of Issuing Houses of Nigeria (AIHN) and others. (GBN)
