In the first two months of 2024, the Nigerian Exchange surpassed all other exchanges in Africa, with investors enjoying gains of 33.70 percent.
The local exchange was ranked as the best-performing in Africa, surpassing the Johannesburg Stock Exchange, Egyptian Exchange (EGX 30) Index, and Ghana Stock Exchange, according to a statement released by the NGX on Tuesday. NGX surpassed Argentina, which came in second, to become the world’s best-performing stock market in the first three weeks of 2024 earlier in January.
In January and February, there was an increase of N13.79 trillion in the market capitalization. In February, the market capitalization of listed stocks finished at N54.707tn, having began the year at N40.917tn.
In a similar vein, the benchmark index, the NGX All-Share Index, closed February at 99,980.30 points, marking an increase of 25,206.53 basis points or 33.71 per cent from 74,773.77 points it opened for trading this year.
The equity market’s impressive performance in the first two months of this year was despite rising insecurity, inflation, and unstable foreign exchange, among other domestic macroeconomic challenges and global uncertainty.
The market, which was bullish in January, producing N1tn cap companies fairly regularly, slowed in February as the bears reared their heads. The bearish has been sustained amid lacklustre corporate earnings as well as better yields in the fixed-income market.
Reacting to the performance of the market, the Chief Executive Officer of Wyoming Capital and Partners, Tajudeen Olayinka, said the stock market was in a repricing mode because of an interest rate hike and continued issuances of one-year Treasury bills at a high effective yield of over 20 per cent.
“So, we are witnessing a shift to the fixed-income market,” he said.
The Managing Director of ARM Securities Limited, Rotimi Olubi, reiterated that the high fixed-income yield was driving traction from the equities market to the fixed-income market.
“We expect this to be sustained in the short term given the recent 400 basis points hike in interest rate.
“However, this presents an opportunity for investors to enter into the equities market at a cheaper price to lock in on dividend payments in the coming months.”
The Monetary Policy Committee of the Central Bank of Nigeria had recently hiked the benchmark interest rate to 22.75 per cent.
