2023: Equity investors rake N13tn, highest in history


8 elite companies control nearly half of stock market with N11trn

Amid rising insecurity, inflation, interest rate hike, foreign exchange crises and other macroeconomic challenges, as well as the uncertainty in the global economy, investors in the Nigerian stock market raked in N13.0 trillion gains in the year 2023.

Since the beginning of the year, the stock market has witnessed an unprecedented rally and buying interest across sectors, especially in the financial services, consumer and industrial goods sub-sectors, which triggered massive bargain hunting in shares of large capitalized companies, while driving up key performance indices and stimulating activities in the market.

The market has been driven by the foreign exchange policy reform and an influx of impressive earnings mainly reported by the banking sector.

Specifically, the Nigerian Exchange Limited, NGX, market capitalisation, which represents the total value of companies listed on the Exchange, closed the year last weekend at N40.92 trillion, a 31.8 percent rise from N27.92 trillion at the end of December 2022.

This is the highest gain ever recorded in the history of the market.

Similarly, another major performance indicator, the Nigerian Exchange (NGX) Limited All-Share Index (ASI), rose by 45.9% to close at 74,773.77 points on Friday December 29, 2023 from 51,251.06 points in 2022. This is also the highest point on record.

Latest reports released by the NGX on domestic and foreign portfolio participation in equities trading for November 2023 showed that foreign portfolio investors have started to increase their stake in the market.
The foreign transactions Year-to-Date, YtD, stood at N362.75 billion as against N364.02 billion in 2022.
The transaction data for 2023 shows that total domestic transactions are circa N2.871trillion, whilst total foreign transactions are circa N362.75billion.

Recall that market capitalisation rose by N5 trillion in the first half (H1) of the year, causing the NGX to hit a 16-year high for the first time since 2008, to close at 60, 108.86 on Tuesday, June 27, 2023. It opened the year at 51,251.06 on January 3, implying an increase of 8,857.8 points or 15 per cent.

Similarly, market capitalisation which opened the year at N27,915 trillion, closed at N32,729 trillion in the first half, representing N5 trillion or 15 per cent appreciation.

Meanwhile, analysts argued that the seemingly bold economic reforms and a strong national economic team of the new government have spurred renewed investors’ confidence in the market.
The unprecedented rally recorded in the market since the beginning of the year also enabled companies to exhibit significant growth in various financial metrics such as profit before tax, total assets and net profit margin, with mouth watery interim dividends, especially for the tier one banks.

For instance, Zenith Bank and Guaranty Trust Holding Company (GTCO) declared an interim dividend of 50 kobo each, amounting to N15.698 billion and N14.72 billion, respectively, up from N9.42 billion and N8.83 billion interim dividends paid within the same period in 2022.

United Bank for Africa (UBA) also paid an interim dividend of 50 kobo, higher than 20 kobo declared in the corresponding period in 2022.

Stanbic IBTC Bank paid N1.50 interim dividend; Fidelity Bank, N0.25; Custodian Insurance, N0.15; Seplat Energy, 3 US Cents; and MTNN, N5.60 among other strong interim dividend stocks.
Also, a year-to-date review of listed firm price movement performance showed that stocks across sectors have witnessed robust capital appreciation, returning double gains to investors.

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