The All Share Index (ASI), the value-based common index that tracks all NGX share prices, rose to 99,300.38 basis points by May 2024, up from its year-opening index of 74,773.77 points, reflecting an average return of around 32.8 percent for the time.
The aggregate market value of all quoted shares finished May 2024 at N56.172 trillion, up N15.25 trillion, or 37.28 percent, from the year’s beginning value of N40.917 trillion.
The difference between the ASI and market value was primarily attributable to the residual gain from primary listings during the period.
The ASI is weighted to remove distortions from primary operations while maintaining an accurate assessment of the secondary market.
Market value is based on the direct addition and subtraction of values, making it subject to the immediate effects of main market operations.
Both indices gradually narrow to a single trend as the market absorbs the impact of any primary activity.
With an average return of 32.8 percent, the Nigerian market is Africa’s best-performing market.
Capital market observers attributed the market’s performance to significantly higher corporate profitability, macroeconomic changes, and the steady return of foreign investors, among other factors.
Mr. David Adonri, Managing Director at HighCap Securities Limited, stated that the market performance represented investor mood.
He stated that the emergence of President Bola Tinubu has energized the stock market because investors appear to believe in his abilities to restructure the economy and enact economic-friendly policies.
He was optimistic that the stock market will retain its upward trend in the second quarter of 2024, despite the backdrop of banking sector recapitalisation, which is expected to prompt investors to purchase rights issues from publicly traded banks.
Why this matters?
A 32.8% average return and a N13.3 trillion gain in market value paint a rosy picture of the Nigerian stock market. This growth suggests investor confidence and potentially signals a healthier business environment.
The market’s positive reaction to the new president, Bola Tinubu also indicates investor confidence in his economic policies. This optimism can fuel further growth.
Bottom Line
Overall, the Nigerian stock market’s performance is encouraging. The fundamentals fueling this rise are positive, but constant monitoring and analysis are required to keep the momentum going.
If the underlying economic fundamentals stay robust and investor confidence holds, the Nigerian stock market should have a profitable year.
