Kayode Tokede
Investors have continued to reap bountifully on the Nigerian Exchange Limited (NGX) as economic reforms by the new government lifted stock market capitalisation by N14.44 trillion in January, 2024.
The N14.44 trillion gain in market capitalisation is coming on the backdrop of rising insecurity, inflation, other macroeconomic challenges, and global uncertainty.
Since the beginning of the year, the stock market has witnessed an unprecedented rally and buying interest, especially in the financial services, consumer, and industrial goods sub-sector, which has continued to trigger massive bargain hunting in large company shares.
This has pushed the key performance indices and stimulated activities in the market, a development that has led to the rating of the stock market as the best-performing in the world.
As of the close of trading January, 2024, market capitalisation stood at N55.358 trillion, representing an growth of N14.44 trillion, from N40.918trillion it opened for trading this year.
Similarly, the NGX’s all-share index (ASI), an indicator used to measure the performance of listed firms on NGX, has hit a record high to close at 104,674.67 basis points January 29, 2024.
It opened the year at 74,773.77 basis on January 2, implying an increase of 26,380.69 basis points or 35.28 per cent to close January 31, 2024 at 101,154.46 basis points.
Sectoral performance revealed that NGX Banking Index dropped by 3.4 per cent to 866.93basis points from 897.20 basis points it opened this year, while NGX Consumer Goods Index closed at 1,394.05 basis points, representing an increase of 24 per cent from 1,121.29 basis points it opened for trading in 2024.
As NGX Oil/Gas Index gained 19.9 per cent to close January 31, 2024 at 1,251.22 basis points from 1,043.06 basis points, NGX Industrial Index emerged the best-performing index, gaining 107.86 per cent to close at 5,637.83 basis points as of January 31, 2024 from 2,712.27 basis points the stock market closed for trading in 2023.
The growth in NGX industry Index has been influenced by soaring demand for Dangote Cement Plc stock.
Dangote Cement’s stock price in January appreciated by N443.10 per share or 138.5 per cent to close January 31, 2024 at N763 per share from N319.90 per share it opened for trading this year.
The cement maker’s market capitalisation gained N7.55 trillion in one month to close at N13 trillion as of January 31, 2024.
The positive momentum of Dangote Cement’ stock price commenced when it was announced to the capital market community that Nigeria’s billionaire investor, Mr. Femi Otedola had acquired some stake in the cement company.
Otedola in a statement said the recent acquisition of shares in Dangote Cement a strategic investment underscored his confidence in Dangote Cement’s potential to generate foreign exchange for the country and his dedication to supporting businesses that contribute to Nigeria’s economic resilience.
“Dangote Cement’s unique position with two export terminals offers a substantial opportunity to earn foreign exchange, crucial for Nigeria’s economy. This, along with the company’s pan-African presence, makes it an ideal investment choice,” Otedola said.
Responding to market performance in January, the vice president, Highcap Securities Limited, Mr. David Adnori stated that investors are trading based on sentiment.
He stated that the emergence of President Bola Tinubu further energised the stock market since market participants have hope in his ability to rejig the economy and implement economy-friendly policies.
