By Peter Egwuatu

Stock market investors gained over N20.994 trillion in the year 2024 following boom in activities which drove up the total value of   shares on the NGX to N61.912 trillion at the close of the year yesterday from N40.918 trillion at the close of 2023.

The sterling performance of the NGX was in spite the high interest rate regime which usually shifts investors’ preference from equities to fixed income investment.

The high interest rate regime followed 875 basis points hike in the Monetary Policy Rate, MPR, by the Central Bank of Nigeria, CBN, in its quest to tame the steady rise in inflation to 34.6 percent, occasioned by Naira depreciation, fuel subsidy removal and other macroeconomic headwinds resulting to sharp reduction in purchasing power of Nigerians.

Reflecting the boom in activities, the NGX All-Share Index, ASI, another major indicator closed December 31, 2024 at 102,926.40 basis points, about    28,773.77 points    or 37.7%   higher than   74,773.77 points the    market opened for trading in 2024.

This implies that equities market  has marginally outperformed inflation, as ASI at 37.7% exceeded the inflation rate at 34.6% and interest rate at 27.5%.

Analysis showed that the equity market saw a robust 39.84% growth in Q1 2024, rising from 74,773.77    basis points to 104,562.06. basis points.

However, the second and third quarters witnessed modest corrections, with declines of -4.31% in Q2 and -1.50% in Q3. This was driven by economic challenges, including high inflation, a depreciating exchange rate, and the introduction of a windfall tax that affected sectoral performances, particularly within the banking sector.

Gainers & Losers

During the year, the NGX produced 102 gainers and 29 losers. Juli Pharmacy  leads the gainers lists, rising 1,645.76%, followed by SUNU Assurance 788.43%, OANDO 508.29%, Eunisell  Interlinked 502.19%, and Conoil 361.50%.

Leading the losers list are   Multiverse Mining and Exploration    -64.01%, Dangote Sugar    -43.48%, NASCON    -41.94%, DAAR Communications -36.36% and    UPDC    Real Estate Investment,    UPDCREIT -28.57%.

Sectorial Performance

All the five sectors Index closed in the green. Specifically, the Oil & Gas, up by 160.01% led the sectoral gains owing to increased demand in Oando which went up by 508.29%. The Insurance Index followed,   rising by 123.22%    led by Sunu Assurance gaining 788.43% . Consumer Goods Index      followed rose    by 54.44%,   led by the    rise in BUA Foods , which went up by 114.58%.

Industrial Goods Index  rose by 31.70%,     driven    by Julius Berger, which went    up    by 261.05%, while the   Banking Index rose 20.88%     on the back of price increase in Wema Bank, which rose by 63.96%.

New listing of shares

The listing of a whooping N8.1 trillion worth of shares from January 2024 to November 2024 was recorded, according to the NGX.

Twenty companies responsible for the N8.1 trillion comprise of 10 financial institutions, two breweries manufacturing companies, who were driven by the need to expand business and meet the Central Bank of Nigeria (CBN) minimum capital requirement. 

 

While most of the banks already listed on the local bourse embarked on public offer, and Rights Issue, others came by way of private placement and “listing by introduction.  

Among major listings by introduction in 2024 was Aradel Holdings Plc that listed N3.05 trillion, followed by Transcorp Power Plc that listed by introduction N1.8 trillion worth of shares.  

Also, Haldane McCall Plc listed by introduction 3.12 billion ordinary shares of 50 kobo each at N3.84 per share with a market capitalization of over N11.99 billion.

Fresh capital

In term of raising fresh capital, Nigerian Breweries Plc, and International Breweries Plc were the only breweries manufacturing companies that raised the highest amount, followed by Guaranty Trust Holding Company Plc (GTCO).  

Nigerian Breweries raised N599.1 billion while International Breweries raised N588.28billion.   

Further investigation by Vanguard revealed that out of the N8.12 trillion capital raised in 2024, GTCO, Zenith Bank Plc, Access Holdings Plc,  FCMB Group Plc, Fidelity Bank Plc, United Bank  for Africa, UBA Plc, FBN Holdings Plc, Sterling Financial Holdings Company Plc, and Stanbic IBTC Holdings Plc contributed about 23.4 % or N1.92 trillion amid CBN’s latest policy in the banking sector.

Jaiz Bank Plc in February 2024 got approval from the Exchange to raise N10.05 billion through private placement.

The non-interest financial institution listed a private placement of 10,048,237,995 ordinary shares of N0.50 each at N1.00 per share.

New appointment in both SEC, NGX

The President of the Federal Republic of Nigeria, Bola Tinubu appointed new board members of the Securities and Exchange Commission (SEC) with Mr. Emomotim Agama as the Director General, Mr. Mainga Katuka, as chairman as well as three executive and two non executive commissioners.

At the bourse, former CEO of Nigerian Exchange Limited, Mr. Temi Popoola was appointed as the Group Managing Director of the Nigerian Exchange Group Plc, Mr Jude Chiemeka, the CEO of the Nigerian Exchange Limited and Mr. Olutemi Shobanjo, as the CEO of the regulatory arm of the group, NGX Regulation Limited.

Technology and product innovation on NGX

Using technology and strategic partnerships to drive visibility and access to the market NGX launched an Unstructured Supplementary Service Data (USSD) platform that allows investors to access real time information about listed companies and connect with trading license holders by using a USSD code *5474#, on their mobile phones.

It also launched a web application, NGX Invest, to transform the process of raising capital in the primary market, particularly public offers and Right Issues.

NGX also partnered MOBILIST (Mobilising Institutional Capital Through Listed Product Structures), a flagship UK public markets programme that supports investment solutions in emerging and frontier market, which help deliver sustainable development and climate transition goals.

NGX launched an Impact Board, a dedicated platform to list and promote sustainability instruments. It aims to foster an ecosystem that facilitates capital raising for projects aligned with driving sustainable development in Nigeria.

SEC new rules

During the year, SEC introduced a new rule that requires crypto firms seeking licenses to set up local offices and have their chief executive officer Nigeria. This is stated in the new framework titled ‘Framework on Accelerated Regulatory Incubation Program Onboarding of Virtual Assets Service Providers and Other Digital Investments Service Providers’. The SEC said that its rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody are going through a process. The purpose of the amendment is to expand the scope of regulation in line with the current 5 provide some protection to investors.

Revamped E-Dividend Mandate Management System Portal

The SEC also launched the revamped e-Dividend Mandate Management System (e-DMMS) portal. This initiative is another important step towards curbing the growth of unclaimed dividend and generally improving investor experience in the Nigerian Capital market.

The revamped e-DMMS portal introduces a “self-service interface” that allows investors apply to mandate their accounts for e-dividend virtually, without having to visit a Registrar or a Bank.

Mutual Funds records 75.8% growth

The Mutual Funds continued its robust performance in 2024 as its Net Asset Value, NAV grew by 75.8% to N3.751 trillion as at    December 13, 2024 from N2.134 trillion at the end of 2023.

In Q3 2024, the total value of all funds rose by    13.95% year-on-year (YoY) to N2.031trn. Seven (7) of the ten (10) mutual fund types posted positive returns, while three (3) ended the quarter in the red.

Market operators react

David Adonri, Executive Vice Chairman at Highcap Securities Limited, said: “Last year, All Share Index closed at 74,502.58 appreciating by 45.4%. As at 20th December 2024, ASI has appreciated by 35.2% closing at 101,129.09. In fact, ASI hit its highest level of 104,056.21 on 14th March 2024. It’s been a record breaking year and indeed another year of fantastic performance. All sectors of the equities market have achieved outstanding growth with the Oil/Gas sector appreciating the highest with 160% growth followed by Insurance with 92% growth. The banking sector has so far grown the least up by 19.4%. When compared to last year, aggregate dividends paid by listed companies grew by 118%. Among the various Boards, ASEM Board grew the highest, appreciating by 147%.”

Continuing, he said: “There were high profile listings especially those of ARADEL and Infrastructure Funds. The deployment of technology in the Primary Market by NGX via a new public offering portal was a game changer in the distribution of public offerings during the year”.

Commenting on the performance of the market in 2024, Tajudeen Olayinka, Investment Banker & Stockbroker said: “The Nigerian stock market has shown more resilience in 2024, in spite of the headwinds: high interest rate regime, high inflationary pressure, reported foreign exchange losses by some public companies, exchange rate volatility, etc. However, the ASI is yet to attain the level we saw it in 2023, including year-to-date return. Quite also unlike 2023 year-end rally or Santa rally, market    suffered a much delayed year-end rally in 2024, arising from unexpected delay in the allotment process of recent public offers by banks, and also because poor handling of capital verification by CBN. A lot happened in 2024 that could have caused a major pushback for the market or raised the volatility level, but the active participation of domestic investors put that to check. 2024 is a year of resilience for the market”.

Commenting as well on the performance of the market, Olatunde Amolegbe, former President of Chartered Institute of Stockbroker,    CIS    said : “ Just as we had predicted in our 2024 outlook the ASI is likely to close up north of 35% and the market capitalisation is likely to perform very well as well. While this will be lower than the 2023 figures they are still very impressive given that they outperformed most frontier markets and some developed markets.”

Reacting to the performance of the market in 2024, Mr. Johnson Chukwu, said: “The NGX was the best-performing stock exchange in Africa during H1’24. This surpassed other African markets like Casablanca and Johannesburg. The growth significantly outperformed major global indices like the NASDAQ (18.13%) and NYSE (6.96%) in the same period.

“The gains were buoyed by a confluence of factors, including robust corporate earnings, dividend declarations, government-led market reforms, and a heightened interest from both domestic and foreign investors. So the performance of the market in 2024 is really exceptional given some of the economic challenges faced during the period”.