Multiverse Mining & Exploration Plc, Wema Bank Plc, Meyer Plc, Academy Press Plc and Champion Breweries Plc topped the league of stocks that outperformed the market in the year 2022. The stock prices of these companies grew by over 100 percent in the year 2022.
Notably, the delayed Santa Rally helped push the market to a record high. Though the market ended the year 2022 with a return of 19.98 percent compared to 6.7 percent seen in 2021, the elevated inflationary environment deprived many investors the real returns. The recently released headline inflation rate for December 2022 moderated to 21.34 percent year-on-year (y/y) as against 21.47 percent in November.
In terms of share price appreciation, Multiverse Mining & Exploration Plc which closed 2022 at N3.98 saw 1890 percent increase in its share price, far outperforming the benchmark index. Also, Wema Bank which came second among other listed stocks and first among banking counters increased by 441.7 percent to N3.90 as of December 30, 2022, the last trading day in the review year. It was followed by Meyer Plc which appreciated by 393.5 percent in 2022 to N2.27.
Most of the 2022 best-performing stocks are already among analysts’ BUY list for 2023. The analysts still believe some of these stocks have sound fundamentals and provide superior risk-adjusted returns over the next 12 months. Though, these high conviction stocks are reviewed quarterly.
Also, on the 2022 top outperformers list include Academy Press Plc which also increased by 158percent to N1.29, and Champion Breweries Plc which also increased by 134percent in 2022 to N5.50. Other stocks that impressed market include Learn Africa which closed the year at N2.20, representing an increase by 88percent in 2022; PZ Cussons Plc which appreciated by 86.1percent in 2022 to N11.35; Guinness Nigeria Plc which rose by 77.7percent to N69.30; Airtel Africa Plc which increased by 71.2percent in the review year to N1635; and NAHCO which rose by 71.1percent to end the year at N6.40.
“2022 was a glorious year for the Nigerian Stock Market. The primary market was boosted with the first GenCo to be listed on the NGX Main Board, Geregu Power, and this should open up the door to others in the sector to get listed,” said Oluwole Ololade Adeosun, President and Chairman of Council, Chartered institute of Stockbrokers (CIS).
Speaking further on what 2022 represents for the Nigerian Capital Market, he said “Apart from the numbers, the market also took some important strategic steps to move the market closer to the highest global standards and ensure a prosperous future for the market and our investors. The Nigeria Exchange Limited (NGX) launched the first exchange – traded derivatives (ETD) market in West Africa, with Equity Index Futures Contracts.
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“We also witnessed the launch of the first Central Counterparty (CCP) Services (CCP) in West Africa, by way of NG Clearing which will facilitate the clearing and settlement of exchange-traded derivatives and commodities traded. Equally important is the African Exchanges Linkage Project (AELP) which has gone live on integrating African capital markets by facilitating cross-border trading and free movement of investments in the continent,” Adeosun said.
He said, “Given the underlying dire macro-economic context, the Nigerian capital market has performed very well in 2022. If the country is able to sail through the Elections storms in February, we should expect a better year for the market in 2023”.
Other outperformers are: Fidelity Bank Plc which also rose in 2022 by 70.6percent to N4.35; Seplat at N1,100 per share as at December 30, 2022 increased by 69.2percent in the review year. BUA Cement Plc which increased by 45.8percent to N97.75; and Presco Plc which closed at N137.50 per share, representing 56.6percent increase in 2022.
At the close of trading session on Friday December 30, the last trading day of the year 2022, the market’s benchmark performance indicators – Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its Market Capitalisation increased from preceding day low of 50,300 points and N27.397trillion to 51,251.06 points and N27.915 trillion.
Other stocks that outperformed the NGX ASI in 2022 are: Ecobank Transnational Incorporated which appreciated by 21.8percent in the review year to N10.60; FCMB Group which rose by 28.8percent to N3.85. Jaiz Bank which at 92kobo per share rose by 64.3percent in 2022. Also, Cadbury at N11.90 per share at the end of year 2022 appreciated by 35.2percent. Ardova at N18.40 per share as at December 30, 2022 increased by 41.5percent. Eterna at N6.69 as at review year-end increased by 32.5percent. Conoil at N26.50 per share rose by 20.5percent in 2022.
“Despite global volatility, the Nigerian Exchange Limited (NGX) maintained its positive momentum in the first nine months of 2022, gaining N4.15 trillion to outshine global markets that have witnessed severe volatility. The market capitalisation of the NGX had opened in 2022 at N22.297 trillion, gaining N4.15 trillion or 18.63 per cent to close at N26.451trillion as of September 30, 2022. The Nigerian All Share Index closed the first half of 2022 with a gain of about 21.17percent year to date (YtD) making it one of the best-performing stock markets in the world,” said Sam Onukwue, Chairman, Association of Stockbroking Houses of Nigeria (ASHON).
The N14 per share as at December 30, 2022 which United Capital exchanged represents an increased by 41.4percent. At N9 per share, Fidson Healthcare appreciated by 44.7percent in 2022. Cornerstone Insurance which closed the year 2022 at 60kobo per share rose by 30.4percent, while Royal Exchange increased by 20.5percent to N1.06. Courteville stood at 46kobo per share as at end of 2022, representing 21.1percent increase.
“However, investors in the Nigerian stock market have witnessed double-digit inflation, scarcity of foreign exchange, uncertainty in global economies, and of course, a hike in the Monetary Policy Rate (MPR) to 15.5 per cent. Investors in the stock market reacted to Central Bank of Nigeria’s (CBN) hike in MPR, leading to the aggressive movement of investors to the fixed income market that comes with low-risk investment and modest yield,” Onukwue said.
He said, “Investors reacted sharply to three quick successions in MPR hike, beginning with 13 per cent in May, 14 per cent in July, and 15.5 per cent in September. September 2022 was quite spectacular because investors exercised extreme caution by holding back further investment in equity, in reaction to the aggressive rise in inflation (20.52 percent) in the month of August, 2022. This decline was due to the continued rise in fixed income rates due to the persistent hike in MPR”.
“The continued increase in interest rates will further affect the stock market as investors will turn to higher yields investible instruments. The Oil and Gas industry will continue to thrive with the expected increase in international oil price. The Banking Sector in Nigeria will continue to flourish. The growth of electronic transactions would further improve bottom lines. The FMCG industry may struggle due to persistent inflation, and the reduction in purchasing power of consumers. Foreign Portfolio Managers and Investors will maintain a “wait and see” until after the 2023 elections,” Onukwue noted on the outlook for 2023.
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