NGX in global investors’ radar after topping world markets in early 2024

Onome Amuge

The Nigerian Stock Exchange (NGX),  which was once overshadowed by its peers, will be grabbing global portfolio investors’ attention following its skyrocketing performance to the top of the world’s stock markets, exceeding expectations as the world’s best-performing stock market in the first month of 2024.

The NGX’s All-Share Index experienced a stunning leap, increasing by 26.43 percent year-to-date as of January 19, 2024, and closing at a record-breaking 94,538.12 points. This is a sharp contrast to the 74,773.77 points that the index closed at in the previous year, and the result has been a boom in equities, with market capitalisation reaching  an impressive 94,538.12 points. The substantial increase has had a positive impact on the overall market capitalisation, which rose to N51.74 trillion ($57.36 billion), a remarkable feat considering the N40.92 trillion ($45.11 billion) market cap recorded at the end of 2023.

According to analysts, the spectacular performance of the NGX is largely due to the outperformance of the banking, cement, and blue-chip sectors.

Dangote Cement continues to be a stand-out performer, with a staggering 68.4 percent year-to-date gain, followed closely by BUA Cement at 53.1 percent, BUA Foods at 24.1 percent, and Geregu Power at 17.1 percent.

The banking sector has been a major contributor to the NGX’s success, with strong performances from Wema Bank Plc, which has seen its share price increase by an incredible 114 percent year-to-date. Unity Bank has also performed admirably, with a year-to-date gain of 116 percent. Jaiz Bank and Sterling Bank have also delivered strong returns to their shareholders, at 77.8 percent and 62.5 percent respectively. 

In addition, the cement industry also played a significant role, with companies such as Dangote Cement and BUA Cement seeing incredible returns of 68.4 percent and 53.1 percent respectively.

The unprecedented growth of the NGX has been described as a watershed moment for Nigerian banks, with leading institutions like FBN Holdings, UBA, GTCO Holdings, Access Holdings, and Zenith Bank recording major gains. The sector is now being hailed as a rising star on the global stage, with analysts citing its newfound resilience and adaptability. 

First Bank of Nigeria Holdings posted a 13 percent year-to-date gain, while United Bank for Africa had a 20.9 percent gain. Guaranty Trust Holding Company saw a 8.89 percent gain, while Access Bank Holdings had a strong 29.6 percent return.

The meteoric rise of the Nigerian stock market is further accentuated by the growing number of companies in the elite Stocks Worth Over N1 trillion (SWOOTs) category, which now includes a record 12 companies. These include blue-chip names such as Access Holdings, United Bank for Africa, Transcorp Hotels, and Geregu Power, which have joined the ranks of the SWOOTs alongside the likes of MTN Nigeria, Dangote Cement, and Airtel Africa.