The Nigerian Exchange Limited (NGX) kicked off 2024 with a resounding leap, fueled by unwavering investor confidence in listed companies. This momentum, echoing the positive sentiment of 2023, painted a vibrant picture for the year ahead, with the All-Share Index soaring 6.54% to close at 79,664.66 points.
While all other indices joined the upward rally, a few stood out from the crowd. The NGX Growth and NGX Sovereign Bond Indices bucked the trend, dipping 6.38% and 1.21% respectively, while the NGX ASeM index remained flat. Yet, the overall sentiment remained undeniably bullish.
Market analysts, still basking in the glow of 2023’s eventful and positive market performance, are cautiously optimistic about 2024. They foresee further improvement, bolstered by an anticipated influx of new companies seeking listings and public offerings. This optimism stems from the belief that with government resources stretched, private capital will play a crucial role in bridging the nation’s infrastructure gap, leading to a more vibrant capital market.
Delving deeper into the data, a closer look reveals the driving forces behind this impressive first-week performance. Dangote Cement (DANGCEM), Airtel Africa (AIRTELAFRI), and MTN Nigeria (MTNN) emerged as the star performers, propelling the market upwards with their respective gains of 1.59%, 5.99%, and 7.95% week-on-week. However, not all stocks shared the joy. Stanbic IBTC (STANBIC), Guinness Nigeria (GUINNESS), and Cadbury Nigeria (CADBURY) saw their values decline by 5.96%, 7.58%, and 11.05% respectively, serving as a reminder of the inherent volatility of the market.
Beyond the individual stock performances, the overall market activity painted a vibrant picture. A total of 3.320 billion shares worth N41.755 billion were traded over 46,994 deals during the week, a significant increase compared to the 1.186 billion shares valued at N31.425 billion traded in 23,969 deals the previous week. This surge in activity further underscores the renewed investor confidence and enthusiasm for the Nigerian market.
Drilling down further, the Financial Services industry dominated the activity chart, claiming 72.25% and 62.40% of the total equity turnover volume and value respectively with its 2.399 billion shares traded at N26.054 billion. The Conglomerates and Oil & Gas industries followed with respective turnovers of 213.139 million shares worth N2.434 billion and 163.313 million shares worth N2.054 billion.
The top three traded equities – Fidelity Bank Plc, FCMB Group Plc, and Sterling Financial Holdings Company Plc – collectively accounted for a sizeable portion of the market activity, contributing 23.13% and 17.46% to the total equity turnover volume and value respectively. Their combined trading volume reached 767.964 million shares worth N7.289 billion, a testament to their continued appeal among investors.
Looking ahead, market analysts offer different perspectives on the trajectory of the NGX in 2024. Mike Ezeh, CEO of Crane Securities Limited, attributes the recent surge to the emergence of President Bola Tinubu, whose pro-business stance has instilled hope in market participants. He emphasizes the importance of stable policies and a conducive business environment for attracting foreign direct investment and boosting the capital market.
Tajudeen Olayinka, Analyst and CEO of Wyoming Capital and Partners, echoes the bullish sentiment, pointing to the anticipated influx of new listings and public offerings as a key driver of market growth. He sees the government’s reliance on private capital for infrastructure development as a catalyst for a stronger capital market.
On the other hand, Victor Chiazor, Analyst and Head of Research at FSL Securities Limited, expresses caution, highlighting the potential impact of government policies like foreign exchange restrictions and subsidy removal on the market. He anticipates a market driven by company performance and a potential shift towards pro-market policies in 2024.
In conclusion, while the first week of 2024 has painted a rosy picture for the Nigerian stock market, the year ahead is likely to be a complex tapestry woven with threads of hope, optimism, and caution. Whether the NGX continues its upward trajectory or encounters bumps along the road will depend on a multitude of factors, both domestic and international. Nevertheless, the renewed investor
Source: African Markets