Amid rising insecurity and other macroeconomic challenges, the Nigerian equities market witnessed remarkable growth in 2024, returning N22 trillion gain to investors.
The Nigerian stock market, which started the year with mixed sentiments, ascended to a 17-year high, occasioned by improved corporate performance across various sectors.
The key indicator, the all-share index, which measures the performance of listed equities, soared significantly, trailing the 47 per cent gain in 2013 to 37 per cent.
At the close of transactions yesterday, it closed at 102,926.4 points from 74,773.77 at which it opened trading in the year, representing 37 per cent growth.
Similarly, market capitalisation gained N22 trillion to close at N62.763 trillion from N40.918 trillion.
The Nigerian Exchange Limited (NGX) reported a significant rise in trading volumes, with equities trading reaching N3.9 trillion in the nine months to September 30, 2024. There was a notable increase from N2.7 trillion during the same period in 2023, indicating heightened investor participation.
The surge in equities is also attributed to increased participation from both domestic and foreign investors. Foreign Portfolio Investment (FPI) transactions rose to N785 billion, nearly tripling N362 billion in 2023 while domestic investors executed transactions totalling N4.13 trillion, representing a 43.7 per cent increase from N2.87 trillion achieved during the same period.
Also, the total transaction value reached an impressive N4.91 trillion by the end of November 2024, reflecting a significant 51.9 per cent year-on-year increase from N3.23 trillion recorded in November 2023.
This marks a new historic peak, surpassing the previous high of N3.9 trillion recorded in 2023.
Analysts attributed the growth to banking sector recapitalisation plans which triggered capital-raising activities as banks issued new shares through public offers, rights issues, and listings by introduction, injecting substantial liquidity into the market.
Also, policy reforms that aimed at liberalising foreign exchange and energy pricing enhanced market transparency and investor confidence, resulting in increased trading volumes in the market. Also, proposed tax reforms, such as the gradual reduction in income tax on company profits, created a more favourable environment for business operations and investments.
These developments underscored the resilience and adaptability of the NGX in 2024, positioning it as one of the leading exchanges globally in terms of returns. The positive investors’ confidence in equities was primarily driven by improved earnings recorded by listed firms despite macroeconomic headwinds bedevilling the nation’s economy.
Data from the exchange showed that the positive market sentiment was evident across several sectoral indices. For instance, the banking index rose from 897.2 points in 2023 to 1092.81 in 2024 adding 21. 8 per cent and buoyed by price appreciation in GTCO (+41 per cent), Zenith (+19 per cent), UBA (+35 per cent), Fidelity (+58 per cent) and FCMB (+28 per cent).
Similarly, the consumer goods index returned a 52.2 per cent gain to investors rising from 1,121.29 points to 1,706.62. The improved performance was driven majorly by UACN (+135 per cent) and Unilever (+103 per cent).
For the industrial goods, the index increased to 3,565.69 from 2,712.27 in 2023, representing 31.5 per cent growth and propelled by gains in Dangcem (+50 per cent) and Lafarge Wapco (+119 per cent).
Also, the insurance index rose to 667.88 points from 321.66 in 2023, representing a 107.6 per cent increase. The improved performance was buoyed by Veritas Kapital (+289 per cent), Wapic (+175 per cent), Cornerstone (+134 per cent), and Guinea Insurance (+134 per cent).
In addition, the oil & gas index appreciated from 1,043.06 points in 2023 to 2,709.99 points in 2024 adding 159.8 per cent. Positive sentiment in Oando (+541 per cent), MRS (+107 per cent) Total (+75 per cent), Seplat (+147 per cent) and Conoil (+362 per cent) lifted the performance of the sector.
Reacting to the performance, President of the NewDimension Shareholders of Nigeria, Patrick Ajudua described the unprecedented rally in 2024 as highly commendable.
He said the development is an indication that investors’ confidence has been restored in the stock market.
He urged the government to do everything within its power to sustain the implementation of key reforms that impacted positively on the economy and extended to the market to consolidate on the performance. (Guardian)
