The Nigerian equities market has proven outstanding resilience in 2024, regardless of ongoing financial challenges reminiscent of excessive inflation and rising rates of interest.
The market posted a formidable acquire of N21.845 trillion, defying blended financial alerts that influenced investor sentiment in 2024.
Shifting gears, the equities market kicked off 2024 on a robust footing, because the native bourse posted a formidable 37.72 per cent acquire in full yr 2024, defying blended financial alerts that influenced investor sentiment amidst new listings on the bourse.
The equities market of the Nigerian Alternate’s rally in 2024 because the second-best efficiency amongst Africa markets.
The important thing efficiency indicator of the NGX, the All-Share Index (ASI) went up by 37.72 per cent to shut the yr 2024 at 102,926.40 factors from 74,773.77 factors at which it opened buying and selling for the yr. Equally, market capitalisation for the interval gained by N21.845 trillion to N62.763 trillion from N40.918 trillion.
The optimistic market sentiment was evident throughout a number of sectoral indices, together with NGX Oil & Fuel index with a yearly acquire of 159.81 per cent. NGX Insurance coverage index rose by 107.64 per cent, whereas NGX Shopper Items index appreciated by 52.20 per cent year-on-date (Y-o-D) as at December 27, 2024.
Additionally, NGX Industrial Items index rose by 31.47 per cent, whereas NGX Banking index grew by 21.80 per cent as at December 27, 2024.
Within the first half of the yr, particularly in January, the bourse crossed the 100,000-point mark for the primary time, pushed by optimistic spillover from 2023 and strategic mop up of Dangote Cement. Nonetheless, this sentiment was not sustained for lengthy, as buyers turned their consideration to the fixed-income market, attracted by rising yields ensuing from the Central Financial institution of Nigeria (CBN) aggressive fee hikes.
Based mostly on efficiency over the primary ten months of 2024, the overall home and international portfolio transactions in Nigeria’s fairness market amounted to N4.913 trillion from January to November 2024.
In the meantime, native buyers remained the dominant drive with their stake up by 83.4 per cent. This discount is attributed to outflows of cash from the equities market to the fixed-income market on the premise of excessive fastened revenue yields following will increase within the anchor fee. However, international buyers elevated stake within the Nigeria equities market to 16.6 per cent.
Though their stake stays beneath historic ranges, the uptick was primarily fueled by improved international investor sentiment towards the reform initiatives applied by the present administration.
In the meantime, the debut itemizing of Transcorp Energy, Aradel Holdings and Haldane McCall on the Nigerian equities market resulted in an extra influx of N5.1 trillion to the bourse. These entrants have contributed to the deepening of the market.
Talking in the marketplace efficiency in 2024, vice chairman of Excessive Cap Securities, David Adonri stated, the equities market closed the yr 2024 on a optimistic aspect, appreciating by 31.47 per cent as at December 30, 2024.
He acknowledged that “it has been a file breaking yr and certainly one other yr of unbelievable efficiency. All sectors of the equities market have achieved excellent progress with the Oil & Fuel sector appreciating the best with 160 per cent progress adopted by Insurance coverage with 92 per cent progress. The banking sector has to date grown the least up by 19.4 per cent.
“The surge within the Oil & Fuel sector was propelled by current deregulation of the petroleum trade. When in comparison with final yr, mixture dividends paid by listed firms grew by 118 per cent. Among the many numerous Boards, ASEM Board grew the best, appreciating by 147 per cent.”
In response to Adonri, to date in 2024, N5.7 trillion in new capital has been raised throughout numerous asset lessons on NGX in line with the CEO of NGX. The contribution of public choices by banks of their course of recapitalisation has assisted the growth within the Major Market.
“There have been excessive profile listings particularly these of Aradel Holdings, Transcorp Energy and Infrastructure Funds. These belittled the exit of Flour Mills of Nigeria and GSK which voluntarily delisted. The deployment of know-how within the Major Market by NGX through a brand new public providing portal was a sport changer within the distribution of public choices through the yr.”
He added that “to date in 2024, equities have marginally overwhelmed inflation as ASI at 37.9 per cent outperformed inflation at 34 per cent. Sadly, the state of affairs for debt is totally different as MPR at 27.6 per cent leaves a adverse return.
“However the adverse actual returns on debt, the Bonds index on NGX declined, indicating the next mixture yield when in comparison with the earlier yr. Consequently, with the excellent performances of equities and debt, the market in 2024 was akin to a candle burning from each ends.”
Responding additionally, an Funding Banker & Stockbroker, Mr. Tajudeen Olayinka acknowledged that the N21.03 trillion market capitalisation acquire in 2024 tells us the presence of giant liquid funds within the arms of institutional buyers who at present dominate actions within the inventory market.
“It additionally holds the truth that the long run is brighter for a few of the listed firms, therefore, buyers are positioning their portfolios for that brighter future. That is additionally the explanation the market stays resilient regardless of the excessive rate of interest regime,” he stated.
