Growth stocks listed on Nigerian Exchange Limited (NGX) rose 41.63percent in 2022 to emerge as the best-performing index on the Exchange for the year. This was revealed at the NGX 2022 Market Recap and 2023 Outlook held in collaboration with EFG Hermes on Wednesday, January 25, 2023.
Temi Popoola, Chief Executive Officer, NGX while delivering his remarks noted that the local performance was driven by improved local investor sentiment and strong corporate earnings. “The total turnover of trades in 2022 improved by 27percent from N916billion to N1.16trillion year-on-year from 2021. Market participation was heavily skewed to the domestic investors. Along with other factors, this signalled a good year for the Exchange despite global macroeconomic headwinds.”
Following the NGX Growth Board was the NGX Oil/Gas Index at 34.05percent driven by sustained high oil prices and demand in the downstream oil sector boosting corporate earnings. Just behind the Oil/Gas index was the NGX Main Board Index with a 33.18percent increase buoyed by the landmark listing of BUA Foods Plc and the pioneer power sector listing of Geregu Power Plc which both added over N1tn in market capitalisation to the Exchange.
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Simon Kitchen, Managing Director-Head of Strategy, EFG Hermes stated that a major policy shift was needed to further catalyse interest in Nigerian stocks, of which he gave a unified exchange rate and credible fiscal & monetary policies as examples. He advised investors to shop for dividend yields in bluechip stocks that offered strong dividend growth.
Speaking further, Popoola enunciated, “On strategic partnerships, we will be forging more with development finance institutions, banks, both local and international to further develop the market. We aim to do more on trading where we improve data dissemination to attract a larger investor base, especially from the retail side. We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.”
The CEO also added that the Exchange would be increasingly focused on sustainability. “NGX sees sustainability as not just important but also a profitable frontier of its business and work is ongoing on developing a framework for certifications in carbon credits trading, pending regulatory approval. On the capital market’s digital transformation, the Exchange is working on USSD launch in collaboration with Telcos and Banks; unlocking the African Capital markets via payment integration with Afrexim Bank’s Pan African Payment Settlement System.”
