Equity investors in the Nigerian Exchange Limited (NGX) have seen their wealth increase by N5.3 trillion in the first half of 2023, thanks to audacious macroeconomic reforms implemented under the new administration. Despite challenges such as rising inflation, social unrest, and global uncertainty, the market has rallied, driven by buying interest from investors, particularly in bellwether stocks.
The NGX All Share Index (ASI), a key indicator of listed firms’ performance, reached a 15-year high and crossed 60,000 index points for the first time since 2008. It closed at 60,968.27 points, representing an 18.96% increase from the opening value of 51,251.06 on January 3, 2023. Additionally, the market capitalization of listed companies, which began the year at N27.915 trillion, closed on June 30 at N33.197 trillion, reflecting a gain of N5.3 trillion in the first half of 2023.
Market operators attribute this positive performance to the policies of the new administration under President Bola Tinubu. Measures such as the harmonization of different exchange rates and the floating of the Naira at the Investors and Exporters window have contributed to the improved fortunes of investors. The easing of the cash crunch and the release of impressive corporate results have also bolstered market sentiment.
Charles Fakrogha, the Chief Relationship Officer at Foresight Securities and Investments Limited, highlighted the smooth transition of power and the implementation of bold reforms as key factors behind the market’s capitalization growth. He also suggested that the recent increase in trading volumes could indicate the potential return of foreign investors to the equities market. On June 30, 2023, a total of 998.08 million shares valued at N15.96 billion were exchanged in 10,580 deals.
Fakrogha emphasized the importance of the new administration establishing a cabinet and proceeding with its plans for the nation. He believes that this will stimulate activities in various sectors of the economy and further revive the capital market.
The CEO of NGX, Mr. Temi Popoola, expressed the exchange’s intention to collaborate with the new administration in developing the right policies to drive market development and increase listings. Popoola emphasized the importance of support from stakeholders such as the Chartered Institute of Stockbrokers (CIS), Association of Securities Dealing Houses of Nigeria (ASHON), and Association of Issuing Houses of Nigeria (AIHN) in achieving these goals.
As the market continues to show positive sentiment and investors’ wealth grows, the collaboration between the NGX and the new administration is expected to play a crucial role in sustaining the upward trajectory of the Nigerian capital market.
