Nigerian Stocks’ Market Capitalization Drops by N334 Billion in July as Bears Gain Control

The market dropped by 0.39% over the previous two weeks, resulting in a N334 billion loss in the market valuation of the Nigerian Exchange (NGX), which put the company’s second half of 2024 on a negative note.

The All-Share Index of the NGX closed at 99,671.28 at the end of the week ending July 12, 2024, a decrease from the opening index of 100,057.49 at the beginning of July.

The NGX’s market cap has decreased by N333.5 billion as a result of the reduction; it was N56.268 trillion at the close of trading on July 12 compared to N56.602 trillion at the beginning of 2024’s second half.   

The market’s ASI closed at 100,057.49, marking a 33.81% performance after H1 2024. Nevertheless, the market has generated a 33.3% year-to-date return when accounting for its present ASI, marginally underperforming national inflation.

Highlights of the performance

With a gain of 33.3% in the last two weeks, Veritas Kapital Assurance is currently the best-performing stock for the second half of 2024.

With a return on investment of 224.3% so far this year, the stock is the second-best performing one in the NGX.

– The share price of Veritas Kapital Assurance is currently trading at N1.20, a minor decrease from its all-time high of N1.26 reached on July 8.  

– Conoil Plc is next, having risen 30.4% in July and ending at a year-high of N137 for its share price. Veritas Kapital Assurance is the leader in this regard. Conoil has produced a 63.2% year-to-date return this year, supported by projections of an astounding 99.9% profit rise in 2023.

– Another stock with remarkable gains in H2 2024 is Livestock Feeds, which has appreciated by 25% thus far. The stock increased 18.9% in the week that ended July 12, 2024.

– Coronation Insurance saw a 17.9% increase in value in the week that ended on July 5, adding to the 19.4% rise that has been observed thus far in July.

– AIICO Insurance has gained 17.9% so far in July, with a year-to-date return of 40% expected in 2024.

– In July, Linkage Assurance had a gain of 17.9%, and thus far this year, it has returned 40%.

– In July, United Capital realized a return of 17% for the month thus far and a 22.6% return for the year thus far.

– With a 20.3% return, Associated Bus Company Plc (ABC Transport) ended the week on July 12 as the best-performing stock in the NGX. On the other hand, the stock has returned 16.7% so far this month.

– As of July, Red Star Express Plc is eighth among the NGX’s best-performing stocks. The stock has returned 15.1% so far this month.  

What to note

The trend seen in the second half of 2023 is a sharp contrast to the NGX’s bearish performance. The NGX saw growth of 19% in the first half of 2023, but the market saw higher growth in the second half, rising by roughly 22.6% in that time.

The market’s expansion during the period was attributed to specific economic reforms, which encouraged investors to show faith in the Nigerian stock market. The NGX All-Share Index increased to a new all-time high of 105,722.78 points on February 18, signaling the continuation of the bullish ride into the first quarter of 2024.  

The loss of nearly a fifth of the value of banking equities caused the NGX to fall by 4.3% in Q2 2024. Capital-raising initiatives by banks and non-banks in the market are probably going to dilute the market’s current shares as we go further into the second half of the year.

It is unclear if the NGX’s negative trend will continue, which could result in a market performance that is less than the 45.8% gain from the previous year.