The Nigerian stock market has continued to show resilience to beat various economic challenges facing the country at the moment by posting yet another impressive return in January 2024.
While various sectors of the economy recount economic hardship in the month, equity investors in the country are smiling all the way to the bank with a net gain of N14.441 trillion as return on their investment.
This was as the All-Share Index (ASI) that tracks share price movements at the Nigerian Exchange Limited (NGX) closed the month at 101,154.46 basis points, after adding 26,380.72 representing 35.28 per cent growth.
As a result, the aggregate market value of all quoted equities on the domestics bourse ballooned to N55.358 trillion from N40.917 trillion opening value in January.
January Spotlights
Although, year 2024 commenced with analysts in some quarters speculating an imminent profit-taking frenzy expected to sweep through the market and trigger price correction, January was characterized with high risk appetite for equities and rounds of profits.
The prevailing positive sentiment led to two historical moments when some listed securities joined the elite club of Stocks Worth Over One Trillion naira (SWOOT) and the crossing of the NGX index of over 100,000 mark.
Analysts were unanimous that the 100,000 index mark was a milestone for the Nigerian market.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said it was a historic moment for the market.
“It’s really historic given that we’ve not been here before. What’s even more remarkable is that the market is still standing very stable and firm despite the bullishness that have taken us to this point,” Amolegbe, former president of Chartered Institute of Stockbrokers (CIS), said, referring to a bullish run that had seen Nigerian equities as one of the three best-performing global stock markets.
Managing Director, Highcap Securities, Mr. David Adonri, said the new index mark called for celebration as well as caution, urging stakeholders to seize the moment to improve the economy.
“This rally will only be useful at end of the day if it translates into capital formation for the productive economy. With this rally, a conducive environment has emerged for capitalization of strategic sectors of the productive economy. Before it fizzles out, let issuers seize the opportunity,” Adonri said.
Afrinvest Securities described the index mark as “a new record milestone”, expressing optimism that the market will sustain “extended positive performance”.
Cordros Securities said the index point was “the highest point on record”, attributing the rally to continuing bargain-hunting by investors.
CardinalStone described the 100,000 index as a “psychological mark” and a “new high”, spurred primarily by bullish sentiments in cement and food heavyweights.
Extending 2023 Fortune
The positive close recorded in January is continuation of the impressive returns posted by the market in 2023 to emerge as one of the best-performing exchanges globally.
NGX closed 2023 as one of the three best-performing markets globally. Average return for Nigerian equities in 2023 stood at 45.90 per cent, equivalent to net capital gains of N12.81 trillion.
The average return made Nigerian equities best inflation-hedging asset class in the country. The market had during the year surpassed a historical record of N40 trillion market capitalisation.
With four consecutive years of positive return, the stock market has shown resilience amidst macroeconomic encounters of foreign exchange (forex) scarcity, naira depreciation and spiraling inflation.
