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Business - Economy Updated: March 06, 2024

Nigerian Exchange tops Africa with 33.70 per cent returns

By Lawrence Agbo
March 06, 2024
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The Nigerian Exchange has emerged as Africa's leading exchange in the first two months of 2024, with investors earning 33.70 per cent returns.

According to an NGX statement issued on Tuesday, the local exchange outperformed the Johannesburg Stock Exchange, the Egyptian Exchange (EGX 30) Index, and the Ghana Stock Exchange.

In January, the NGX emerged as the world's best-performing stock market in the first three weeks of 2024, outperforming Argentina.

From January to February, the market capitalization increased by N13.79 trillion. The market capitalization of listed equities began the year at N40.917tn and ended February at N54.707tn.

The NGX All-Share Index's benchmark index increased by 25,206.53 basis points, or 33.71 per cent, from its opening trading value of 74,773.77 points to 99,980.30 points at the end of February.

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Despite rising levels of insecurity, inflation, and volatile foreign exchange, as well as other internal macroeconomic issues and global uncertainty, the equities market posted a remarkable performance in the first two months of this year.

With the bears making their appearance in February, the market, which had been bullish in January and consistently producing N1 trillion cap businesses, paused.

Because of the fixed-income market's higher yields and the company's disappointing profits, the adverse sentiment has persisted.

In response to the market's performance, Tajudeen Olayinka, the Chief Executive Officer of Wyoming Capital and Partners, told The Punch that the stock market was in a repricing phase due to an increase in interest rates and the ongoing issuance of one-year Treasury bills at a high effective yield of more than twenty per cent.

“So, we are witnessing a shift to the fixed-income market,” he said.

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Managing Director of ARM Securities Limited, Rotimi Olubi, reaffirmed that the high fixed-income yield was forcing investors away from the equity market and into the fixed-income sector.

“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 benchmark interest rate was recently raised to 22.75 per cent by the Central Bank of Nigeria's Monetary Policy Committee.

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Lawrence Agbo

Lawrence is a vibrant digital journalist that loves creating SEO-focused content that drives busines...

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