The Nation Newspaper

Tag: stock markets

  • Nigeria leads global stock markets with N10.8tr gain

    Nigeria leads global stock markets with N10.8tr gain

    • Dangote, Rabiu, others top wealthiest stock

    Nigerian equities are the fastest-rising stocks globally so far in 2024 as investors increased stakes on the Nigerian market amid expectations that improved macroeconomic performance would translate to better returns.

    Benchmark indices for Nigerian equities closed weekend with average year-to-date return of 26.43 per cent, implying that investors have earned about N10.81 trillion in net capital gains so far this year.

    Nigeria’s wealthiest men, including Alhaji Aliko Dangote and Alhaji Abdul Samad Rabiu, have seen their valuations on the double. Dangote Cement, where Dangote holds more than three-quarters of shares, saw about 54 per cent capital gain to close as the most influential stock in the N6.29 trillion rally at the stock market last week. Rabiu’s BUA Cement’s share price jumped by about 46 per cent.

    The performance of Dangote Cement and BUA Cement rallied the average year-to-date return for the NGX Industrial Goods Index, which tracks cement and other manufacturers, to 59.44 per cent, more than a double of the overall average market return.

    Nigerian equities recorded their biggest rally in a week in nine years to close weekend with average return of 13.84 per cent, equivalent to net capital gain of about N6.29 trillion.

    Afrinvest Securities attributed the rally to “strong buy sentiment”, describing the market’s surging index point as a “record”.

    Global stock data tracked by The Nation’s Market Intelligence indicated that Nigerian equities were the best-performing stocks globally with most advanced stock markets struggling with a sluggish start.

    Most global stock indices were largely on the negative at the weekend, as geopolitical tensions in the Middle East fuelled uncertainties about the global macroeconomic outlook. In United States, the S & P 500 Index dropped by 0.1 per cent during the week. The NASDAQ Index rose by a modest 1.0 per cent. The Dow Jones Industrial Average (DJIA) slipped by 0.3 per cent. United Kingdom’s FTSE Index declined by 1.9 per cent. France’s CAC 40 Index dipped by 1.2 per cent. Germany’s XETRA DAX Index lost 0.9 per cent. China’s Shanghai Composite Index dropped by 1.7 per cent. However, Japan’s Nikkei 225 Index rose by 1.1 per cent.

    Broad indices showed similar trend, closing mostly on the downside. The MSCI World Index declined by 0.4 per cent last week. STOXX Europe, which tracks European markets, dropped by 1.3 per cent. The MSCI EM Index, which tracks emerging markets lost 3.5 per cent.The MSCI FM Index, which tracks frontiers markets, however inched up by 0.2 per cent.

    Nigeria outperformed other African markets. South Africa’s FTSE/JSE All Share Index recorded a negative return of -2.2 per cent for the week. Egypt’s EGX 30 Index appreciated by 5.2 per cent while Morocco Casablanca Masi Index rose by 1.6 per cent.

    Most analysts said they expected the rally at the Nigerian market to continue citing the impending earnings seasons and anticipated performance of most quoted companies.

    Read Also: African stock markets lead global equities returns

    “In the short term, we expect market performance to be dominated by the bulls, as positioning for 2023 full-year earnings releases and accompanying dividends declarations should outweigh profit-taking activities,” Cordros Capital stated.

    Afrinvest securities expected the “the positive sentiment to linger albeit at a softer price, moderated by profit-booking”.

    Bismarck Rewane-led Financial Derivatives Company (FDC) however cautioned that the “sizzle is likely to fizzle” citing concerns that the surge in market prices might not be sustained overtime.

    Cordros Capital also advised investors “to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings”.

    Afrinvest Securities called for “cautious entry and equity selection based on fundamentals” due to the tendency for profit-taking to rein in the bulls.

    The All Share Index (ASI) – the common value-based index that tracks all share prices at the Nigerian Exchange (NGX), closed weekend at 94,538.12 points as against its year’s opening index of 74,773.77 points. It had opened 2023 and 2022 at 51,251.06 points and 42,716.44 points respectively. ASI opened the week at 83,042.96 points.

    Aggregate market value of all quoted equities rose simultaneously from the years’ opening value of N40.918 trillion to close weekend at N51.735 trillion. It had opened 2023 and 2022 at N27.915 trillion and N22.297 trillion respectively. Market value of equities opened the week at N45.443 trillion.

    The NGX 30 Index, which tracks the 30 largest stocks at the stock market, closed weekend with above average year-to-date return of 27.33 per cent, which underlined the extent of gains by several large-cap investors. Large-cap stocks are traditionally known to be less sentimental than other stocks, tracking both uptrend and downtrend. 

    The near perfect concurrence in the movement of the ASI and market value underlined the fact that the increase in market value was primarily due to positive changes in share prices through capital gains, rather than primary market activities such as new listings. Sovereign Trust Insurance listed new shares worth N1.43 billion last week.

    Most analysts expected the Nigerian market to record its fifth consecutive year of positive returns in 2024. Nigerian equities had braced through political transition to post average return of 45.90 per cent, equivalent to net capital gains of N12.81 trillion, one of the three highest returns globally.

    The market had broken its well-known previous cycle of decline in pre-election year to record its third consecutive positive performance in 2022, with full-year average return of 19.98 per cent, equivalent to net capital gain of N4.455 trillion. It had closed 2021 with average return of 6.07 per cent, equivalent to net capital gains of N1.278 trillion. In the throes of the outbreak of COVID-19 pandemic in 2020, it had recorded average return of 50.03 per cent, representing net capital gains of N6.483 trillion.

    The overall performance of the equities market has largely been influenced by what the market described as “post-inauguration rally”, referencing the positive sentiments that have trailed the pro-market reforms of the Tinubu’s administration, since May 2023.

    The NGX had stated that experts’ opinions on the strong performance of the market were that the bullish trend was due to “a combination of factors, including investor sentiment influenced by macroeconomic developments such as the formation and swearing-in of the economic cabinet by President Bola Tinubu”.

    The NGX had also attributed the market performance to the “audacious macroeconomic reforms under the new administration” of Tinubu.

    According to the NGX, market operators were of the view that “the policies of the new administration under President Bola Tinubu” had “led to the rise in the fortunes of investors”.

    Afrinvest Securities had said “economy reform optimism” bolstered the market performance, noting that the “the rally in the market followed the promise of critical reforms by the President Bola Tinubu administration”.

  • African stock markets lead global equities returns

    African stock markets lead global equities returns

    • Egypt, Nigeria, Ghana make top five

    African equities are the best-returning stocks globally with average return within the continent more than a double of returns in several other markets.

    Global stock data tracked by The Nation’s Market Intelligence at the weekend indicated that African stock markets were showing considerable resilience than other markets, with three of the continent’s five largest markets in the world’s top five best returns chart.

    Egypt, Nigeria and Ghana were among the top five global returns with Egypt scaling up to global leadership with average return of 69.1 per cent.

    The data included the most prominent stock markets and cut across the various tiers of advanced, emerging and frontier markets. These included United States, United Kingdom, Germany, Japan, France, Hong Kong, Russia, India, Brazil, China, Thailand, Turkey, Saudi Arabia, Qatar and United Arab Emirates (UAE). African markets included Nigeria, South Africa, Kenya, Morocco, Ghana, Egypt and Mauritius.

    Egypt’s EGX 30 Index posted a year-to-date return of 69.1 per cent, the highest return among tracked global stock markets. Turkey’s BIST 100 Index, previously the best-performing index, dropped to the second position with average return of 44.0 per cent. Nigeria retained its third position on the global list with average return of 39.59 per cent. Ghana’s GSE Composite Index indicated average return of 28.1 per cent. United States’ Nasdaq Index posted average return of 36.5 per cent, but this was moderated by average return of 19.4 per cent by the S & P 500 Index. Japan’s Nikkei 225 Index placed sixth with 23.8 per cent.

    Other top-10 returns included Germany’s Xetra DAX, 19.9 per cent; France’s CAC 40 Index, 15.8 per cent; India’s BSE Sens Index, 14.8 per cent and Brazil’s Ibovespa, which posted average return of 14.5 per cent.

    In Africa, South Africa’s FTSE/JSE ASI recorded modest return of 0.9 per cent. Kenya’s NSE 20 Index posted the lowest return of -9.7 per cent while Mauritius’ SEMDEX Index recorded a marginal decline of -0.1 per cent.

    Other global markets with year-to-date positive returns included Morocco’s Casablanca Masi Index, 10.6 per cent; United Kingdom’s FTSE All Share Index, 0.9 per cent; Russia’s RTS Index, 8.9 per cent and Saudi Arabia’s Tadawul All Share Index, which closed with average return of 7.1 per cent so far this year.

    However, China’s Shanghai Composite Index, Hong Kong’s Hang Seng, Thailand’s SET Index, UAE’s ADX General Index and Qatar’s DSM 20 Index reported negative returns of -3.9 per cent; -17.4 per cent; -17.2 per cent, -7.9 per cent and -7.8 per cent respectively.

    Read Also: Stock markets stumble amid global outlook jitters

    Nigeria’s benchmark index, the All Share Index (ASI) of the Nigerian Exchange (NGX), is a common value-based index and it tracks all share prices at the Exchange, a feature shared with benchmark indices of United Kingdom, South Africa, Saudi Arabia and UAE among others. Most other indices are selective indices, tracking a basket of stocks, although mostly representative of their markets.

    Sectoral indices by the NGX indicated significantly higher returns above the ASI’s average return. The NGX 30 Index, which tracks the 30 largest stocks at the stock market, closed weekend with a year-to-date return of 42.78 per cent. The NGX Oil and Gas Index recorded the highest return of 125.12 per cent. The NGX Consumer Goods Index trailed with average gain of 94.16 per cent. The NGX Banking Index posted average return of 92.23 per cent. The NGX Insurance Index recorded a gain of 69.28 per cent while NGX Industrial Goods posted a modest return of 12.21 per cent.

    The ASI closed weekend at 71,541.74 points as against its week’s opening index of 71,419.87 points. Aggregate market value of all quoted equities at the NGX rose from its week’s opening position of N39.082 trillion to close weekend at N39.149 trillion.

    Most analysts at the weekend remained optimistic on the outlook for the Nigerian equities market. Analysts at Afrinvest Securities stated that they expected “the bullish momentum to be sustained, propelled by bargain opportunities”.

    Analysts at Cordros Capital stated that the market would remain mixed in the days ahead as investors cherry-pick stocks, urging investors to seek positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.