How Nigerian inventory market thrived regardless of banking reforms, new listings — Every day Nigerian
By Rukayat Adeyemi, NAN —
The Nigerian inventory market skilled spectacular development in 2024, pushed by key macroeconomic developments.
These embody banking sector recapitalisation, new listings and elevated crude oil revenues, which helped to scale back the nation’s fiscal imbalance.
Notable listings, resembling Geregu Power Plc, Transcorp Power Plc, Aradel Holdings and BUA Foods, energised buying and selling actions, providing buyers a broader vary of blue-chip shares.
The depreciation of the naira, influenced by macroeconomic reforms by the Central Bank of Nigeria (CBN) and the Federal Government, additionally considerably boosted market efficiency.
Foreign capital influx steadily elevated, rising from 4 per cent in mid-2023 to a mean of 16 per cent by November 2024.
According to the Nigerian Exchange Ltd. (NGX), the All-Share Index delivered a stellar return of 283.45 per cent since 2020, climbing from 26,842.07 on the finish of 2019 to 102,926.40 by Dec. 31, 2024.
The All-Share Index closed 2024 at 102,926.40, reflecting an annual development of 37.65 pet cent, in comparison with 74,773.77 on the finish of 2023.
Market capitalisation, which opened the yr at N40.918 trillion, added N21.85 trillion year-on-year to shut at N62.768 trillion.
In 2024, the CBN mandated industrial banks to lift minimal capital thresholds: N500 billion for worldwide authorisation and N200 billion for nationwide authorisation.
Ohers are N50 billion for regional authorisation and N20 billion and N10 billion for nationwide and regional non-interest banks, respectively.
Banks got 24 months, beginning April 1, 2024, to satisfy these necessities.
The directive inspired banks to lift contemporary fairness by way of non-public placements, rights points, public presents, mergers and acquisitions, and license upgrades or downgrades.
This transfer spurred fairness issuances, boosting investor confidence and demand for financial institution shares, contributing considerably to the market rally.
Between January and November 2024, 20 firms, together with 10 monetary establishments and two breweries, raised a complete of N8.1 trillion in shares on the Exchange.
Major listings included Aradel Holdings Plc (N3.05 trillion), Transcorp Power Plc (N1.8 trillion) and Haldane McCall Plc (N11.99 billion).
In the brewing sector, Nigerian Breweries Plc and International Breweries Plc raised N599.1 billion and N588.28 billion, respectively.
Guaranty Trust Holding Company Plc raised N400.5 billion, whereas Access Holdings garnered N351.01 billion by way of rights points.
In spite of excessive inflation which stood at 34.19 per cent and a 48 per cent naira depreciation within the first half of 2024, the market demonstrated resilience.
The Oil and Gas sector led with 160 per cent development, adopted by Insurance which had 129.58 per cent enhance and Consumer Goods recording 52.24 per cent.
Commenting on the efficiency, Mr David Adonri, Vice-Chairman of Highcap Securities Ltd., described 2024 as a “record-breaking year of fantastic performance”.
He highlighted distinctive development throughout all sectors, with the oil and gasoline sector main with a outstanding 160 per cent appreciation. Dividends paid by listed firms surged by 118 per cent in comparison with the earlier yr, with the ASEM Board demonstrating the very best development at 147 per cent.
Adonri attributed the first market growth to financial institution public choices throughout their recapitalisation.
He famous the affect of high-profile listings resembling Aradel Holdings, Transcorp Power, and infrastructure funds, which mitigated the affect of delistings by Flourmills and GSK.
The introduction of a brand new public providing portal by the Nigerian Exchange Group (NGX) revolutionised public providing distribution by way of know-how.
He famous, “Equities have marginally beaten inflation with a 35.6 per cent return, compared to inflation at 34 per cent.”
Adonri projected stronger efficiency in 2025, supported by ongoing banking recapitalisation and anticipated public choices.
Similarly, Mr Tajudeen Olayinka, an funding banker and stockbroker, lauded the market’s resilience amid challenges like excessive rates of interest, inflationary stress and change price volatility.
He, nevertheless, famous that the All Share Index was but to achieve the extent skilled within the yr 2023, together with year-to-date return.
“Quite additionally in contrast to 2023 year-end rally or Santa rally, market suffered a a lot delayed year-end rally in 2024.
“This rose from sudden delay within the allotment means of latest public presents by banks, and likewise due to poor dealing with 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,” he mentioned.
He highlighted the potential for development in 2025, pushed by elevated public firm listings and world prospects.
At the closing gong ceremony for 2024, the Chief Executive Officer of NGX, Mr Temi Popoola, counseled the market’s resilience and innovation.
He mentioned, “Macroeconomic shifts, significantly within the oil and gasoline sectors and forex devaluation, have been transformative.
“As we approach 2025, continued reforms and a stable macroeconomic environment will sustain growth, boost liquidity, and deliver long-term value for all market participants.”
However, with the challenges, the Nigerian inventory market closed 2024 on a excessive be aware, with new all-time highs and trillion-naira valuations for a number of firms.
Strong home investor participation, strategic listings, and optimistic macroeconomic components underscored the market’s resilience and potential for continued development in 2025.
NAN Feature
