The Nigerian Exchange Ltd. (NGX) market capitalisation has gained N15.25 trillion in value in the first five months of the year amidst domestic and global economic headwinds.

NGX, in a report on Thursday in Lagos, stated that the market attained the record following investors’ continuous investment in fundamentally sound quoted companies on the bourse.

It said N15.25 trillion in market capitalisation growth was recorded amid rising insecurity, inflation, and hikes in the Central Bank of Nigeria’s monetary policy rate, among other macroeconomic challenges and global uncertainty.

“Specifically, the overall market capitalisation closed May 2024 at N56.172 trillion, gaining N15.25 trillion or 37.28 per cent from N40.917 trillion, the stock market opened for trading this year. Consequently, the NGX All-Share Index increased to 99,300.38 basis points, about 24,526.61 or 32.8 per cent Year-To-Date (YTD) performance from 74,773.77 basis points it closed for trading in 2023,” the NGX said.

It noted that, with 32.8 per cent growth in the major market index, the Nigerian stock market maintained its position as Africa’s most-performing stock exchange.

It said that it had enforced compliance, transparency, and a market-friendly environment, which continued to impact heavy participation in stock trading by both local and foreign investors.

The regulator said that since the beginning of the year, the stock market had witnessed an unprecedented rally and buying interest, especially in the industrial goods, oil and gas sector and consumer and sub-sector.

According to the report, the sectors have continued to trigger massive bargain hunting in large company shares.

It said, “For instance, the NGX Industrial Index has gained 73.08 per cent YTD to 4,694.42 basis points as of May 2024, while the NGX Consumer Goods Index appreciated by 39.5 per cent to close at 1,564.19 basis points. The taking position in Dangote Cement Plc influenced the 73.08 per cent YTD growth in the NGX Industrial Index.

“The stock price of Dangote Cement has appreciated to N656.70 per share as of May 2024, about 105.28 per cent growth from N319.9 per share the stock opened for trading this year. Among the top index performance was the NGX Oil/Gas Index, which gained 24.07 per cent YTD performance to 1,294.16 basis points, and the NGX Insurance Index, which gained 14.17 per cent to close May 2024 at 367.23 basis points.

“Amid reforms in the banking sector, the NGX Banking Index dropped by 11.13 per cent to close May 2024 at 797.37 basis points as investors trade listed banking stocks with caution.”

Meanwhile, capital market analysts attributed the positive performance to the mixed corporate first quarter ended March 2024 earnings by listed companies, the federal government’s reforms in the foreign exchange market, and fuel subsidy removal.

Reacting, the vice-president of Highcap Securities Ltd., David Adnori, stated that investors traded based on sentiment in the months under review.

Mr Adonri stated that the emergence of President Bola Tinubu as president further energised the stock market since market participants had confidence in his ability to rejig the economy and implement economy-friendly policies.

Mr Adonri expressed optimism that the stock market might maintain its positive momentum in the second quarter of 2024, given the banking sector’s recapitalisation, which is expected to trigger investors buying rights issues from listed banks.

Also, Tajudeen Olayinka, an investment banker and stockbroker, said that the drive by many investors to hedge against inflationary spirals put their buy interests in equity.

Mr Olayinka explained that a simultaneous rise in interest rates and equity prices demonstrates this.

He stated that beyond this analogy, the economy was still awash with ex-CBN governor Godwin Emefiele’s N30 trillion illegally printed for use during former President Muhammadu Buhari’s administration.

“So, there is excess liquidity in the system, chasing fewer profitable investment opportunities in the economy,” he said.

Meanwhile, amid the hike in the Monetary Policy Rate (MPR) to 26.25 per cent, capital market experts stated that its impact had created sentiment trading among investors who saw the fixed-income market as an alternative investment opportunity to hedge against double-digit inflation.

At a Monetary Policy Committee (MPC) meeting, CBN governor Olayemi Cardoso stated that the committee’s key focus is to achieve price stability by effectively using the tools available to the monetary authority to rein in inflation.

Nigeria’s headline inflation rate continued to climb to 33.69 per cent in April 2024, its highest since March 1996, up from 33.2 per cent in the prior month.

This marks the 16th consecutive month of acceleration in inflation, partly because of renewed weakness in the naira coupled with the removal of fuel subsidies.

(NAN)