Nigeria’s stock market value increased by N18.2 trillion in 11 months to November 2024 despite monetary policy rate (MPR) increases by the Central Bank of Nigeria (CBN) as well as other macroeconomic headwinds.
Since the beginning of 2024, the stock market has witnessed significant rallies and buy interests, especially in the financial services, consumer, and industrial goods sub-sectors, which have continued to trigger massive bargain hunting in large companies.
Specifically, the overall market capitalisation that opened 2024 at N40.918 trillion gained N18.2 trillion or 44.5 percent to close on November 29, 2024, at N59.107 trillion.
Consequently, the Nigerian Exchange Limited All-Share Index (NGX ASI) closed on November 29, 2024, at 97, 506.87 basis points, about 22,733.10 basis points or 30.4 percent from 74,773.77 basis points at the opening of the year.
New listings and investors’ interest in some blue-chip companies contributed to the stock market’s 30.4 percent year-to-date (YtD) growth as the local economy faced double-digit inflation, increased MPR (benchmark interest rate) and exchange rate volatility.
With foreign investors’ increased participation in the stock market, the likes of Airtel Africa Plc, Dangote Cement Plc, Seplat Energy Plc, Guaranty Trust Holding Company Plc, among others, have appreciated in stock prices significantly.
Read also: Stock market opens week on a negative note as mixed sentiment persists
Firms’ Stock Price Appreciation
Checks showed that the stock price of Dangote Cement gained 49.7 percent YtD to close on November 29, 2024 at N478.80 per share, while Airtel Africa appreciated by 14 percent YtD growth to close at N2, 156.90 per share.
Seplat Energy also gained 129 percent to close November 29, 2024 at N5, 300 per share.
Also, the stock price of Zenith Bank Plc grew by 15 percent YtD to close at N44.50 per share while GTCO’s stock price gained 30.7 percent YtD to close at N52.95 per share as of November 29, 2024.
The listing of Transcorp Power Plc and Aradel Holdings currently valued at N2.7 trillion and N2.25 trillion by market capitalisation respectively also contributed to the stock market’s N59.107 trillion growth in the period under review.
The inflation rate, according to the National Bureau of Statistics (NBS), stood at 33.88 percent as of October 2024 from 28.2per cent November 2023. The CBN has raised the MPR to 27.50 percent as of November 2024 from 18.75 percent November 2023.
“The considerations of the meeting were held on the backdrop of renewed inflationary pressures as the headline food and core measures rose year on year in October 2024. Members therefore agreed unanimously to remain focused on addressing price developments,” Olayemi Cardoso, CBN governor, had said after the last Monetary Policy Committee (MPC) meeting.
This was the sixth time the CBN had raised the interest rate since February 2024. In September, the bank pushed the rate to 27.25 percent following a drop in the country’s inflation level in August 2024.
Among other key macroeconomic challenges was the weakening of the Naira to N1, 663.396 against the dollar as of November 2024 from N942.117 against the dollar in November 2023.
Read also: Stocks gain N8bn as MPC raises policy rate
Amidst these challenges, foreign investors have increased their participation in the stock market, trading about N744.34 billion out of the N4.47 trillion in 10 months of 2024, representing 17 percent participation. This is against N291.38 billion out of N2.9 trillion transactions in 10 months of 2023, representing 10 percent participation.
With 30.4 percent in 11 months gain in the stock market, analysts have projected that the bourse is not expected to surpass its performance in 2023. The stock market gained 45.90 percent in 2023.
Commenting on the performance of the market in the first 11 months of 2024, Ambrose Omordion, chief operating officer, InvestData Consulting Limited, said: “Trading on the Exchange this year is buoyed by renewed buying interest after a series of reforms that have attracted foreign investors amid mixed corporate scorecards by listed firms.”
He stated that many companies across various sectors posted impressive numbers, while some recorded mixed performance. Others, he said, had disappointing numbers.
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