Market activity for stocks on the Nigerian Exchange Limited (NGX) ended the first half of 2024 (January–June) in a very positive manner, driven by a significant increase in investor trust in listed companies.
This outstanding achievement, which defies current economic obstacles including high inflation, a declining currency rate, and enduring security worries, is a turning point in NGX’s history.
The general confidence was reflected in noticeable changes in consumer behaviour, which led to the All-Share Index closing the half year at 100.057.49 index points.
Furthermore, despite recent bearish tendencies observed in Q2 of the year, the year-to-date (YTD) return of the NGX All-Share Index demonstrates its durability, standing at an astounding 33.81%.
Contradictory results in 2024’s first two quarters
Nonetheless, the first two quarters of 2024, which comprised the first half of the year, saw mixed results from the equity market.
Strong business results, encouraging dividend announcements, and the NGX listing of Transcorp Power Plc, a subsidiary of Transcorp Plc, all contributed to the first quarter’s outstanding return of 39.84%.
By introduction on the Nigerian Exchange’s Main Board, the business listed 7.5 billion shares at a price of N240.00 per (NGX).
The power generation company’s listing increased the market capitalization of the NGX by N1.8 trillion, coinciding with a 10% increase in share prices on the first trading day.
The quarter’s favourable investor attitude in the market was also ascribed to a number of positive developments, including the administration of President Bola Tinubu’s beneficial policies, which included the floating of the naira, the elimination of fuel subsidies, and the simplification of exchange rates.
As of the end of the final trading day on June 28, however, returns for the second quarter had decreased to -4.31%.
A number of Central Bank of Nigeria (CBN) policy pronouncements contributed to the index’s steep decline. Notably, the CBN unveiled a new plan for recapitalizing commercial banks that seeks to raise N4 trillion in new capital in the next two years.
The environment of increased interest rates, which has pushed investors towards fixed-income assets and negatively impacted market performance, was mainly blamed for the slump.
Market outcomes
Accordingly, data that Nairametrics made available indicated that the All-Share Index, the broad index used to gauge the performance of Nigerian stocks, began trading on January 2, 2024, at 74,773.77 index points, and ended the month on June 28, 2024, at 100,057.49 points, increasing by 25,283.72 basis points, or 33.81%.
Subsequent investigation showed that the Nigerian Exchange Limited (NGX), which began trading in the first half of the year with a market capitalization of N40.917 trillion, closed the H1’2024 at N56.601 trillion, earning a gain of approximately N15.684 trillion so far this month.
