In six months to June 30, Nigeria’s listed equities value increased by N5.3trillion, thanks to oil & gas, banking, consumer goods, and insurance stocks.
At the close of trading on Friday, June 30, the Nigerian Exchange Limited (NGX) All Share Index (ASI) and Market Capitalisation stood at 60,968.27 points and N33.197 trillion compared to 51,251.06 points and N27.915trillion at the beginning of the year. The market’s six months positive return increased to 18.96percent.
Stocks that exceeded 100percent return in the review six months period include MRS (+460.3percent), Conoil (+213.2percent), Eterna (+213.9percent), FTN Cocoa (+724.1percent), Transcorp (+210.6percent), Sterling Bank (+140percent), and BUA Foods (+108.8percent).
“In H1’23, Nigerian equities embarked on a cautious trajectory, with investors adopting a prudent approach, as the nation awaited the inauguration of the new government following the 2022 Presidential elections. Notably, the emergence of Bola Ahmed Tinubu, the APC candidate, garnered attention due to his alignment with market-friendly policies. Consequently, local investors keenly observed, anticipating the forthcoming policies of the new administration,” according to analysts at Lagos-based Vetiva Research.
Other stocks that rallied by over 100 percent include: Unity Bank (+114.5percent), Norther Nigeria Flour Mills (+114.6percent), Lasaco (+198.9percent), Coronation Insurance (+107.5percent), International Energy Insurance (+281.6percent), Tripple Gee (+374.7percent), Geregu (+101.3percent), Ikeja Hotel (+280percent), Nahco (+185.2percent), Skyway Aviation Handling Company (+103percent), and Transcorp Hotels (+274.4percent).
Aside the above counters, investors also raised remarkable bet on banking stocks like Access Corporation (+95.3percent), FBN Holdings (+56.4percent), UBA (+61.2percent), Fidelity Bank (+60.9percent), GTCO (+52.2percent), Stanbic IBTC Holdings (+61.4percent), and Zenith Bank (+42.7percent).
“During his inaugural address, President Tinubu made a significant announcement regarding the termination of the longstanding fuel subsidy programme, relieving the country’s financial stability of a substantial burden. This pivotal decision elicited a positive response from local investors, as seen in the notable surge of 5.23percent in the market the day after his speech.
“Additionally, the current administration’s unification of the parallel and official exchange rates was met with favourable reactions from investors. These proactive legislative actions further instilled confidence among investors, highlighting the government’s commitment to strengthening key sectors,” Vetiva Research analysts further noted.
They noted that outlook for second half (H2) 2023 “remains dependent on several factors, including government policies and global economic conditions. With continued implementation of market-friendly measures and ongoing economic reforms, the Nigerian equity market is expected to maintain a positive trajectory. Overall, the outlook for H2’23 is cautiously optimistic, supported by the government’s commitment to bolstering the economy and attracting investments”.