Despite economic hurdles, Nigeria’s stock market surged by 38.27% (N15.66 trillion) in capitalization over the first nine months of 2024. This impressive performance highlights strong investor confidence, with significant investment in blue-chip companies.
Inflation has risen from 28.92% in December 2023 to 32.15% by August 2024, and the naira exchanged at N1,637.69 to the dollar. Additionally, the Central Bank of Nigeria increased the Monetary Policy Rate (MPR) to 27.25%, up from 18.75% last year, aiming to control inflation.
As of September 27, 2024, the market capitalization of the Nigerian Exchange Limited (NGX) reached N56.578 trillion, reflecting a remarkable increase from N40.918 trillion at the end of 2023. The NGX All-Share Index also rose to 98,458.68 points, yielding a 31.7% average return for investors.
Analysts credit government reforms in the foreign exchange market and MPR hikes for the positive market performance. Foreign investor participation increased to 18.86% by August 2024, up from 9.22% the previous year, boosting high-value stocks like Dangote Cement and Airtel Africa.
For instance, Dangote Cement shares climbed 66.3% to N532, while Airtel Africa rose 17% to N2,200. The NGX Banking Index also showed growth, benefiting from strong corporate earnings and recapitalization efforts, with Guaranty Trust Holding Company’s stock rising 17% to N47.4.
Additionally, reforms in the Oil and Gas sector drove the NGX Oil & Gas Index up by 91%, spurred by Seplat Energy’s share price increase.
Market experts believe the stock market’s positive momentum will continue, bolstered by upcoming corporate earnings and ongoing banking sector reforms. Despite high interest rates, liquidity from institutional investors remains strong, signaling optimism for the future.
