Equities trading on the Nigerian Exchange Limited (NGX) concluded November on a positive note, showcasing a remarkable surge in investor confidence toward listed corporations.
Investors displayed notable optimism, aligning with the renewed hope agenda and navigating internal shareholder dynamics. The standout moment was the listing of 4 billion ordinary shares of Mecure Industries Limited, a pharmaceutical and nutraceutical manufacturing company, at N2.96 per share on the NGX growth board.
This listing injected a substantial N11.84 billion into the Exchange’s market capitalization, offering a fresh wave of liquidity to the Nigerian capital market. The positivity in the market was evident as the All-Share Index closed November at 71,365.25 index points, marking an impressive 3.08% increase from the previous month.
The year-to-date (YTD) return of the NGX All-Share Index now stands at a commendable 39.25%. Despite prevailing concerns related to inflation, interest rate hikes, volatile exchange rates, and potential impacts of the upcoming 2023 general elections, investor confidence has remained robust.
In a historic achievement, the All-Share Index crossed the 70,000-point mark for the first time, closing at 71,365.25 points. The positive sentiment among investors can be attributed to several factors, including favorable policies introduced by President Bola Tinubu’s administration. These policies include the removal of fuel subsidies, streamlining of exchange rates, and the floating of the naira.
Market analysts highlight the impact of President Tinubu’s policies, creating an environment where investors strategically position themselves to take advantage of recent record earnings posted by quoted firms. The NGX All-Share Index opened November at 69,236.19 index points and closed at 71,365.25 points at the end of the month, gaining 3.08%.
Market performance statistics reveal that the NGX, opening the trading month at N38.038 trillion in market capitalization, closed the month at N39.051 trillion, resulting in a month-to-date gain of about N1.013 trillion.
Analysts, including Mr. David Adonri, Executive Vice Chairman of Hicap Securities Limited, attribute the positive trend to the earning season. Investors are driven by expectations of favorable dividends, sustaining positive sentiment during this period.
Despite ongoing political uncertainties related to election cases being determined in courts, the market’s craving for dividends has overshadowed potential impacts. Mr. Olatunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited, notes a demographic shift in NGX dynamics, with more local institutions and retail investors, reducing volatility in stock prices.
The expectation that policies will encourage foreign investment serves as a primary trigger for the stock market rally. Additionally, the anticipation of a short-term increase in inflation levels, coupled with portfolio rebalancing by fund and asset managers toward the end of the first half of the year, contributes to the market’s positive trajectory.