Business News
Nigerian stock market hits 60,000 points for the first time in 15 years.
The Nigerian stock market closed on Tuesday, June 27, 2023, with a gain of 1.3%, crossing the 60,000 index points mark for the first time in over 15 years.
The Nigerian stock market closed on Tuesday, June 27, 2023, with a gain of 1.3%, crossing the 60,000 index points mark for the first time in over 15 years.
Investors were optimistic about the market, citing the recent economic decisions of President Bola Tinubu, particularly the changes to Nigeria’s foreign exchange operational framework.
President Tinubu’s economic policies, which have been dubbed “Tinubunomics” by Nairametrics, appear to be having a positive impact on Nigeria’s economy. It is therefore not surprising that the capital market, which is a barometer of the economy, is also doing well.
Market performance
According to available statistics obtained by Nairametrics, the equities market on Tuesday closed with capital gains of N421 billion.
- The All-Share Index (ASI)- the barometer that measures all share prices at the Nigerian Exchange (NGX), continued its winning streak as the benchmark index gained 1.30% to settle at 60,108.86 points, the highest point in over a decade (precisely 5 March 2008 when it was 66,381.20).
- Gains in MTNN (+2.77%), Zenith Bank (+4.62%), and GTCO (+5.20%) buoyed the broad market’s strong performance.
- As a result, the year-to-date (YTD) return rose to 17.28%, while market capitalization gained N421.19 billion to close at N32.73 trillion.
A review of today’s market activity revealed that trade turnover was lower than it had been during the previous session, with a 4.01% decrease in transaction value.
9,463 transactions involving a total of 763.70 million shares worth N12.53 billion were completed. With 111.67 million units exchanged, Access Holdings (+3.61%) led the volume chart, and GTCO (+5.20%) led the value chart with transactions totalling N2.69 billion.
What operators said
Former President of the Chartered Institute of Brokers (CIS) and the Managing Director of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe said the main driver was the beginning of the cleanup programme by the president at the CBN.
He noted that market operators now expect that the reforms in the monetary and forex policy will lead to an inflow of foreign portfolio investment in the market.
- “This was the main driver of the market. The changes at the CBN should lead to changes in the monetary and forex policies which are expected to increase foreign participation in the market.
- Recall that the previous policies of the CBN had hitherto led to a sharp drop in participation by foreign portfolio investors from 65% in 2015 to less than 10% in 2022. The new reform will lead to an increase in appetite by this class of investors in our market,” he said.
The head of investment banking at Cordros Capital, Mr Femi Ademola, said that the Nigerian markets have been significantly affected by the Central Bank of Nigeria’s (CBN) frequent changes in regulations in recent years.
He said that the CBN’s frequent interventions in the market and a large number of circulars and policy actions have resulted in market volatility. He noted that the recent implementation of the naira redesign policy had a negative impact on the market and made the public angry with the CBN Governor.
Mr Ademola argued that these regulatory flip-flops have created uncertainty in the market and made it difficult for businesses and investors to plan for the future. He called on the CBN to adopt a more stable and predictable regulatory framework in order to boost investor confidence and promote economic growth.
Stocks snap 4-year losing streak
Nigerian stocks seem on track to snap a 4-year losing streak for the month of June.
- Stocks are currently up 7.78% in June and look set to close the month positively after going four years on a losing streak.
- The NGX All Share Index is also up 17.28% YTD.
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