Investors at the Nigerian stock market are in for a better deal as share prices rallied yesterday to their highest level-ever.
Investors continued bargain-hunting for equities on expectations that ongoing reforms will stimulate significant improvements in the economy.
The benchmark index – which measures pricing trend at the stock market, exceeded its previous all-time high set in March 2008 to set a new record. There are expectations that the rally may extend further in the period ahead.
The All Share Index (ASI)- a value-based common index that tracks all share prices at the Nigerian Exchange (NGX), is widely regarded as Nigeria’s sovereign equities index, a barometer of pricing trend and investors’ return at the nation’s stock market.
The ASI set a new all-time record to close at 66,490.34 points yesterday, about 119.14 points or 0.18 per cent above the previous highest index point of 66,371.20 points recorded on March 05, 2008.
The rally nudged the average year-to-date return for Nigerian equities to 29.73 per cent, implying that investors in Nigerian equities have earned about N8.3 trillion in capital gains so far this year.
Nigeria’s average return of 29.73 per cent is one of the five highest returns globally, ahead of several advanced and emerging global stock markets; including United States, United Kingdom, France, Germany, Japan and China.
There is analysts’ consensus at the stock market that the bullish trend witnessed in recent period was driven partly by positive investors’ perception of the pro-market administration of President Bola Tinubu.
The NGX yesterday stated that experts’ opinions on the strong performance of the market were that the bullish trend was due to “a combination of factors, including investor sentiment influenced by macroeconomic developments such as the formation and swearing-in of the economic cabinet by President Bola Tinubu”.
The Director-General of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, who spoke after a capital market stakeholders’ meeting, which closed at the weekend, said there was general optimism that ongoing reforms would rejuvenate the economy and lead to a brighter future.
Not less than 277 stakeholders attended the meeting of the Capital Market Committee (CMC), a consultative assembly of stakeholders in the capital market. Attendees included management and senior staff of SEC, capital market operators (CMOs), representatives of relevant government agencies including the Central Bank of Nigeria (CBN), Debt Management Office (DMO), Federal Inland Revenue Service (FIRS), Investments and Securities Tribunal (IST), National Insurance Commission (NAICOM), National Pension Commission (PENCOM), and Financial System Strategy 2020 (FSS2020).
The NGX had also attributed the market performance to the “audacious macroeconomic reforms under the new administration” of Tinubu.
According to the NGX, market operators were of the view that “the policies of the new administration under President Bola Tinubu” had “led to the rise in the fortunes of investors”.
Afrinvest Securities had said “economy reform optimism” bolstered the market performance, noting that the “the rally in the market followed the promise of critical reforms by the President Bola Tinubu administration”.
Analysts at Arthur Steven Asset Management said the equities market’s bullish momentum was “because of the new administration which tends to affect the market positively”.
“The market reacted to the high expectation from the new administration as the government promised the investors easy repatriation of their investment and profit,” Arthur Steven Asset Management stated.
The ASI rose from its opening index of 66,151.38 points to close by 66,490.34 points, indicating average gain of 0.51 per cent yesterday. It had opened 2023 at 51,251.06 points.
Aggregate market value of all quoted equities also rose from its opening value of N36.205 trillion to close yesterday at N36.391 trillion, representing net capital gain of N186 billion. It had opened 2023 at N27.915 trillion.
The NGX stated that yesterday’s performance was particularly driven by “a surge in banking stocks as investors strategically positioned themselves, taking advantage of the recent record earnings posted by banks”.
The bullish pricing trend at the stock market has also seen a corresponding level of activities, a twin movement that validates a value-driven pricing trend.
The Nation exclusively reported that transactions at the stock market have reached a record highpoint in recent period.
Latest trading data obtained at the NGX showed that transactions at the stock market rose by 22 per cent to cross the N2 trillion thresholds to N2.15 trillion in the first seven months of this year.