Despite concerns regarding inflation, interest rate hikes, and weak macroeconomic indicators, the confidence of investors in Nigeria’s stock market remained robust. Over a three-month period, the Nigerian Exchange Limited (NGX) emerged as one of the top-performing stock exchanges in Africa, ranking second with a growth of 19.33 percent. Ghana Stock Exchange led the list with a growth of 22.84 percent, followed by the Malawi stock exchange at 15.79 percent.
This positive trend propelled the market to a 15-year high due to strong positive sentiments. During the month of August, the market capitalization, representing the listed value of equities, increased from N35.011 trillion to N36.422 trillion, a gain of N1.41 trillion. The All-Share Index (ASI), which measures the performance of Nigerian stocks, also experienced growth, opening the month at 64,337.52 index points and closing at 66,548.99 points, reflecting a gain of 2,211.47 basis points or 3.44 percent.
The market’s bullish trend was driven by various factors, including investors’ interest in low, medium, and high-capitalization stocks across major sectors. The new administration under President Bola Tinubu introduced favorable policies, such as the removal of fuel subsidies and exchange rate unification, which attracted investors. Additionally, positive corporate earnings reported by quoted firms and the formation of the country’s economic cabinet contributed to the market’s performance.
Market analysts believe that despite prevailing macroeconomic uncertainties, investors, particularly domestic ones, remain optimistic about the country’s economic prospects. The resilience of the equities market is attributed to heightened investor confidence in the new administration’s policies and the expectation of domestic economic growth. Cordros Research anticipates a positive return of 25.8 percent for the full year of 2023, although foreign investors may remain cautious due to foreign exchange liquidity issues.
thesun