Despite prolonged inflation, interest rate hike, insecurity and other macroeconomic challenges, the Nigerian Exchange Limited (NGX) emerged as the second best-performing exchange in Africa in the last three months.
A breakdown of the performance showed that the market capitalisation, which stood at N20.034 trillion at the beginning of June rose to N36,422 trillion at the end of the transaction on August 31, representing an increase of N16.388 trillion while the all-share index appreciated by 41.2 per cent from 38,443.78 to 66,548.99.
With the development, African markets, a website that tracks the performance of exchanges in Africa, indicated that Ghana Stock Exchange with (+22.84 per cent) return emerged first while NGX (+19.33 per cent) emerged second on the list, followed by Malawi stock exchange (+15.79 per cent).
Also, for August, the market capitalisation which opened the trading month of August at N35.011 trillion, closed the month at N36.422 trillion, hence gaining N1.41 trillion. On the other hand, the ASI, which is the broad index that measures the performance of Nigerian stocks, opened the trading month at 64,337.52 index points at the beginning of trading on August 3, 2023, and closed at 66,548.99 points at the end the month on August 31, gaining 2,211.47 basis points or 3.44 per cent.
The development has pushed the market to its15-year high on the back of strong positive sentiments, even as the positive sentiments were attributed to investors’ jostling for low, medium, and high capitalised stocks across some major sectors, following favourable policies introduced by the new administration to boost the economy such as the removal of fuel subsidies, unification of exchange rate.
With the development, investors have continued to strategically position themselves and increase their portfolio in stocks with high dividend yield and capital appreciation for future gains.
Reacting to the performance of the market, analysts maintained that most investors, particularly domestic investors, are optimistic that the economy will take shape soon. Hence, the reason the stock market has defied current macroeconomic uncertainties.
Cordros Research said the equities market resilience reflects heightened investor optimism for domestic growth with the new administration’s promulgation of long-needed policies.
According to the analysts, the implementation of accommodative monetary policy and resilient corporate earnings have so far supported buying activities in the market.
Meanwhile, the NGX has restated its commitment to ensure continuous optimisation of intermediaries and increase access to the market for retail investors through technology.
Divisional Head, Capital Markets, NGX, Jude Chiemeka, at retail investors webinar held in collaboration with Futureview Asset Management Limited, with the theme: ‘How to Process Outstanding Dividend’, said the NGX has established a digital gateway to democratise access to the market, reduce friction and drive retail participation in the capital market.
Chiemeka assured that the SEC would continue to work assiduously with stakeholders to reduce the cases of unclaimed dividends in the market to the barest minimum.
According to him, increased financial literacy and awareness would help to reduce the growing number of unclaimed dividends in the capital market.
Chiemeka also noted that some retail investors are unaware of the backlog of unclaimed dividends that have accrued to them over many years, especially those investors with legacy investments held on their behalf.
He added that the webinar was aimed at providing procedures to investors, especially the retail segment on how to process outstanding and retrieve unclaimed dividends.