NGX Tops African Exchanges with Impressive 33.70% Gain

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Employees work at computer terminals on the trading floor at the Nigerian Stock Exchange (NSE) in Lagos, Nigeria, on Monday, Oct. 26, 2015. Nigeria plans to create a $25 billion fund with public and private financing to modernize infrastructure and avoid a recession, Vice President Yemi Osinbajo said. Photographer: George Osodi/Bloomberg via Getty Images

The Nigerian Exchange (NGX) has emerged as Africa’s top-performing exchange in the first two months of 2024, delivering impressive returns of 33.70 percent for investors. According to a statement from the NGX on Tuesday, the local bourse has outperformed other major exchanges in Africa, including the Johannesburg Stock Exchange, Egyptian Exchange (EGX 30) Index, and The Ghana Stock Exchange.

In January, NGX also secured the title of the world’s best-performing stock market in the initial three weeks of 2024, surpassing Argentina, which claimed the second position. The market capitalization has seen significant growth, appreciating by N13.79 trillion between January and February. Beginning the year at N40.917 trillion, the market cap closed February at N54.707 trillion. Similarly, the NGX’s All-Share Index closed February at 99,980.30 points, marking an increase of 25,206.53 basis points or 33.71 percent from the opening point of 74,773.77 points.

Despite facing challenges such as rising insecurity, inflation, and unstable foreign exchange rates, the equity market demonstrated resilience. While January showcased bullish tendencies, February saw a slowdown as bears took control. The ongoing trend is attributed to lackluster corporate earnings and higher yields in the fixed-income market. According to Tajudeen Olayinka, CEO of Wyoming Capital and Partners, the market is undergoing a repricing phase due to interest rate hikes and the issuance of high-yield one-year Treasury bills. Consequently, there is a notable shift towards the fixed-income market.

Rotimi Olubi, Managing Director of ARM Securities Limited, emphasized that the allure of high fixed-income yields is diverting attention from the equities market. Despite this, there is optimism among investors, with expectations of entering the equities market at more favorable prices to capitalize on dividend payments in the future. The recent benchmark interest rate hike by the Monetary Policy Committee of the Central Bank of Nigeria to 22.75 percent further underscores the prevailing market dynamics.

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