The Nigerian stock market has achieved a significant milestone, with the equities value surpassing the N50 trillion mark and the NGX-ASI (Nigerian Exchange Limited All Share Index) exceeding 91,000 points. The market’s robust performance, characterized by a 45.90% return in 2023, positions it as the global leader with a 22.90% return, outperforming other major economies, including Argentina.
Analysts from the Financial Derivatives Company attribute this success to new listings of capitalized stocks, policy reforms, and lower interest rates. The market has witnessed a remarkable start in 2024, with only one session of negative close and a week-to-date rally of 10.66%.
Despite the recent inflation report indicating a 28.92% inflation rate in December, the stock market continues to attract investors’ interest. Meristem research analysts expect the positive momentum to be sustained, driven by the anticipation of more corporate actions and the search for value in the Nigerian market.
While the market has experienced significant gains, analysts caution about potential profit-taking activities due to declining liquidity levels. Tickers trading at extremely high levels may prompt investors to take gains on stocks that have appreciated significantly. However, the overall sentiment remains positive, barring any negative developments.
Key advancers in the market include Conoil Plc, Eterna Plc, and NEM Insurance, all recording a maximum 10% daily increase, contributing to the market’s benchmark performance index reaching new highs.
United Capital analysts anticipate continued positive sentiment, emphasizing that investors will likely focus on stocks with strong fundamentals for both value and growth. The expectation of profit booking and mild sell-offs is acknowledged, but the outlook remains optimistic, especially ahead of the FY-2023 earnings season.