• Friday, March 01, 2024
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BusinessDay

At 22.90%, Nigeria’s stock market offers world’s best return

NGX All share index surpasses 101000 psychological level

…Equities value crosses N50trn mark

…NGX-ASI surpasses 91,000 points

At 22.90 percent, the stock market of Africa’s largest economy offers investors the best return globally.

The Nigerian stock market earlier this week overtook that of Argentina, a country it was trailing last week in terms of returns.

The Bismarck Rewane-led Financial Derivatives Company analysts in their economic outlook for 2024 noted that NGX has transitioned from a Lagos-based fringe player to a global player, adding that the Nigerian equities market outperformed others in 2023.

The market saw a successful outing in 2023 which pushed return higher at 45.90percent.

“Performance boosted by new listings of capitalised stocks, policy reforms and lower interest rates,” Financial Derivatives Company analysts added.

The bulls have continued to dominate Nigeria stock market activity this year. The market has seen only one session of negative close this 2024. Week-to-date (WtD), the market has rallied by 10.66percent. Nigerian Exchange Limited (NGX) All Share Index (ASI) rose by 2.04 percent on Thursday.

Following four consecutive sessions of positive closes seen this week, the market has further defied Monday’s inflation report as investors interest in equities pushed the benchmark performance index above 91,000 points at the close of trading on Thursday.

The National Bureau of Statistics (NBS) inflation report came in with inflation exceeding 18-year high to hit 28.92percent in December, up by 72 basis points (bps) from 28.21percent in November 2023.

Lagos-based Meristem research analysts in their recent note said they expect the local bourse to sustain its positive momentum, adding that their outlook for the Nigerian market and the anticipation of more corporate actions are likely to drive investors’ interest in the search for value.

The analysts however said, “Building on recent weeks’ performance, we anticipate some profit-taking activities due to declining liquidity levels. Also, tickers trading at extremely high levels may prompt investors to take gains on stocks that have appreciated significantly.

“On a balance of factors, we expect the positive sentiment to continue barring a negative development that may sway market in the opposite direction. Thus, we anticipate the NGXASI to close in the green zone this week”.

The (NGX) All-Share Index (ASI) and Market Capitalisation increased further from preceding trading day’s lows of 90,063.27 points and N49.280trillion respectively to
91,896.97 points and N50.289trillion.

In 17,804 deals, investors traded 1,140,376,336 shares on Thursday valued at N19.293billion.

Conoil Plc led the market’s league of advancers on Thursday, rising from N102 to N112.20 , adding N10.20 or 10 percent. It was followed by Eterna Plc which moved up from N19 to N20.90, adding N1.90 or 10 percent; and NEM Insurance which increased from preceding day’s lows of N7.50 to N8.25, adding 75kobo or 10 percent.

These stocks and others that recorded remarkable maximum 10 percent daily increase helped the market’s benchmark performance indicator to reach new high.

United Capital analysts said in their January 15 note that they expect positive sentiment to drive the market, “as bargain hunting continues.

“We expect the local bourse to record a positive performance this week. Investors are expected to continue to cherry-pick stocks with strong fundamentals, (value or growth) for dividend scouting investors, ahead of FY-2023 earnings season. At different intervals, we expect profit booking and mild sell-offs.”