The top 10 stockbroking companies in the Nigerian stock market made a staggering N19.209 billion in the first half of 2024 thanks to higher brokerage fees brought in by more volume and value of trades on the NGX.
Compared to the same period in 2023, when the top 10 brokers received N10.789 billion in commissions, this indicates a considerable increase.
Increased purchasing activity resulted from investor confidence remaining high despite worries about growing inflation and interest rate hikes.
This was made possible by the exchange of 56.672 billion shares during the review period, for a total value of N1.423 trillion.
The News Chronicles’ statistics show that this amount accounts for 54.43% of the total value recorded from January 1, 2024, and June 28, 2024.
A total of 44.02% of the volume transacted during the review period was made up of the 56.672 billion shares. The Nigerian Exchange (NGX) reported these results in its monthly broker performance report.
Stanbic IBTC Stockbrokers, Cardinal Stone Securities, and Apt Securities were the top-performing stockbroking businesses in Nigeria; between them, they transacted N727.078 billion, or 50.42% of the total value of all transactions performed in the first half of the year.
With a transaction value of N280.606 billion, or 10.73% of the total transaction value, Stanbic IBTC Stockbrokers Limited took first place in the ranking.
Closely behind, with shares worth N276.674 billion, or 10.54% of the total transaction value, was Cardinal Stone Securities. Furthermore, Apt Securities & Funds reported trades with an estimated value of N170.798 billion, or 6.53%.
During the first half of the year, EFG Hermes traded shares valued at N127.938 billion, while United Capital facilitated transactions of N148.355 billion.
The others are Apel Asset, Chapel Hill Denham, Cordros Securities, Meristem Stockbrokers, CSL Stockbrokers, and N88.853 billion, which enabled deals of N71.275 billion, N88.853 billion, N82.069 billion, and N75.921 billion, respectively.
Large commissions for brokers
Based on a superficial examination of the traded value, it appears that the top ten brokers may have earned a combined commission of around N19.209 billion during the first half of the year in question.
Broker commissions can range from 1.35 percent to 1.5 percent, however some charge less based on the volume of deals.
Nonetheless, this is a 78.04% increase in commissions compared to the N829.962 billion earned during the same period in 2023.
Market outcomes
Despite economic headwinds like high inflation, a declining currency rate, and security worries, equity trading on the Nigerian Exchange Limited (NGX) ended the first half of 2024 on a strong note, with the All-Share Index finishing at 100,057.49 points.
Even though the first two quarters of the year had varied results, the NGX All-Share Index has demonstrated resiliency with a year-to-date return of 33.81%.
An outstanding 39.84% return was seen in the first quarter, mostly due to favorable dividend announcements, robust business profitability, and the listing of Transcorp Power Plc, which increased the NGX market capitalization by N1.8 trillion.
Favorable measures from President Bola Tinubu’s administration, such as the elimination of fuel subsidies, the simplification of exchange rates, and the floating of the naira, also contributed to the increase in investor confidence.
However, the new recapitalization strategy for commercial banks by the Central Bank of Nigeria and a higher interest rate environment that pushed investors toward fixed-income securities caused a loss in returns in the second quarter, with returns dropping to -4.31%.
