Economy
NGX Exhibits Resilience, Gains N15.25trn in Five Months Amid Headwinds
Amidst domestic and global economic headwinds, Nigerian Exchange Limited’s market capitalisation gained N15.25 trillion in value in the first five months of 2024 as investors continued to invest in fundamentally sound quoted companies on the bourse.
The N15.25 trillion market capitalisation growth is coming amid the spate of rising insecurity, inflation, and hikes in the Central Bank of Nigeria’s (CBN) monetary policy rate, among other macroeconomic challenges and global uncertainty.
Specifically, the overall market capitalisation closed May 2024 at N56.172 trillion, gaining N15.25 trillion or 37.28 per cent from N40.917 trillion the stock market opened for trading this year.
Consequently, the NGX ASI increased to 99,300.38 basis points, about 24,526.61 or 32.8 per cent Year-to-Date (YtD) performance from 74,773.77 basis points it closed for trading in 2023.
At 32.8 per cent growth in a major market index, the Nigerian stock market still maintains its position as the most performing Exchange in Africa.
Also, the management of the Exchange has enforced compliance, transparency and a market-friendly environment that continues to impact heavy participation in stock trading by both local and foreign investors.
Since the beginning of 2024, the stock market has witnessed an unprecedented rally and buying interest, especially in the industrial goods, oil & gas sector and consumer and sub-sector, which has continued to trigger massive bargain hunting in large company shares.
For instance, the NGX Industrial Index has gained 73.08 per cent YtD to 4,694.42 basis points as of May 2024, while the NGX Consumer Goods Index appreciated by 39.5 per cent to close at 1,564.19 basis points.
The taking position in Dangote Cement Plc influenced the 73.08 per cent YtD growth in the NGX Industrial Index.
The stock price of Dangote Cement has appreciated to N656.70 per share as of May 2024, about 105.28 per cent growth from N319.9 per share the stock opened for trading this year.
Among the top index performance was NGX Oil/Gas Index which gained 24.07 per cent YtD performance to 1,294.16 basis points and NGX Insurance Index which gained 14.17 per cent to close May 2024 at 367.23 basis points.
Amid reforms in the banking sector, the NGX Banking Index dropped by 11.13 per cent to close May 2024 at 797.37 basis points as investors trade listed banking stocks with caution.
Capital market analysts stated that the stock market performance in five months of 2024 is against the backdrop of mixed corporate first quarter ended March 2024 earnings by listed companies, the federal government’s reforms in the foreign exchange market, and fuel subsidy removal.
The Vice President of Highcap Securities Limited, Mr David Adnori, stated that investors traded based on sentiment.
Adnori stated that the emergence of Bola Tinubu as president further energised the stock market since market participants had confidence in his ability to rejig the economy and implement economy-friendly policies.
Adnori was also optimistic that the stock market might maintain its positive momentum in the second quarter of 2024, against the backdrop of banking sector recapitalisation that is expected to trigger investors’ buying rights issues from listed banks.
Amid the hike in MPR to 26.25 per cent, capital market experts stated that its impact had created sentiment trading among investors who saw the fixed-income market as an alternative investment opportunity to hedge against double-digit inflation.
At the Monetary Policy Committee (MPC) meeting, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, stated that the key focus of the Committee remained to achieve price stability by effectively using tools available to the monetary authority to rein in inflation.
Nigeria’s headline inflation rate continued to climb to 33.69 per cent in April 2024, its highest since March 1996, up from 33.2 per cent in the prior month.
This marks the 16th consecutive month of acceleration in inflation, partly because of renewed weakness in the naira coupled with the removal of fuel subsidies.
An investment banker and stockbroker, Mr.Tajudeen Olayinka, stated that the drive by many investors to hedge against inflationary spirals put their buy interests in equity.
Olayinka stated, “And this is demonstrated by a simultaneous rise in interest rates and equity prices. Beyond this analogy, the economy is still grossly awash with Godwin Emefiele’s N30 trillion illegally printed for the use of former President Muhammadu Buhari’s administration.
“So, there is excess liquidity in the system, chasing fewer profitable investment opportunities in the economy.”
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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