…as market cap hits N1.4 trillion
Lagos, Sept. 2, 2023 – Investors’ confidence in Nigeria’s stock market has remained strong in the last three months to enable the Nigerian Exchange Limited (NGX) emerge as one of the best performing exchanges in Africa in spite of concerns about the soaring inflation, interest rate hikes and weak macroeconomic indices,
According to African markets, a website tracking the performance of exchanges in Africa, Ghana Stock Exchange (+22.84%) emerged first, while NGX (+19.33%) emerged second on the list and followed by Malawi stock exchange (+15.79%).
The NGX said this development has pushed the market to its 15-year high on the back of strong positive sentiments as the market cdpitalization-listed value of equities, which opened the trading month of August at N35.011 trillion, closed the month at N36.422 trillion, hence gaining N1.41 trillion.
On the other hand, the All-Share Index (ASI), which is the broad index that measures the performance of Nigerian stocks, opened the trading month at 64,337.52 index points at the beginning of trading on August 3, 2023, and closed at 66,548.99 points at the end the month on August 31, gaining 2,211.47 basis points or 3.44%.
The bullish trend can be attributed to investors’ jostling for low, medium, and high capitalised stocks across some major sectors amid favourable policies introduced by President Bola Tinubu’s new administration such as the removal of fuel subsidies, unification of exchange rate, investors strategically positioning themselves and taking advantage of the recent record earnings posted by quoted firms and the recent formation of the country’s economic cabinet and executives. Interestingly, the market traded in mixed sentiments during the month under review.
Reacting to the performance of the market, market analysts said that most investors, particularly domestic investors are optimistic that the economy will take shape soon, hence the reason the stock market is defying current macroeconomic uncertainties.
Cordros Research in their Market Review and Outlook for Financial Markets titled Veering from the Watershed Point, stated that the equities market resilience reflects heightened investor optimism for domestic growth with the new administration’s promulgation of long-needed policies.
According to the report, the implementation of policy reforms, accommodative monetary policy and resilient corporate earnings have so far supported buying activities in August.
The report further said that “Even though foreign investors are expected to stay on the sidelines as long as FX illiquidity issues persist, its baseline expectation is that the market will deliver a positive return of 25.8% in the full year of 2023”. (GBN)
