Business
Nigerian Stock Market Wraps 2023 With A Stellar N13trn Investor Gain
In 2023, President Bola Tinubu’s reforms spurred a remarkable surge in the Nigerian stock market, with investors witnessing a staggering N13 trillion increase in returns.
Tinubu’s strategic policies, including the removal of fuel subsidies and the streamlining of foreign exchange rates, instilled robust confidence among investors, driving significant growth in fundamental stocks.
Despite facing double-digit inflation, the market’s capitalization closed the year at N40.918 trillion, a striking 46.6% leap from its 2022 closure at N27.91 trillion.
As a result, the Nigerian Exchange Limited All-Share Index (NGX ASI) soared to an unprecedented high of 74,773.77 basis points, marking an impressive Year-to-Date gain of 45.90% from its opening at 51,251.06 basis points for trading.
The addition of new listings significantly influenced the record-breaking trajectory of the NGX ASI, sustaining the stock market’s upward momentum.
Companies like MeCure Industries Plc, VFD Group, Nigeria Infrastructure Debt Fund (NIDF), and Africa Plus Partners notably contributed to the positive trajectory observed in the period.
In 2023, significant stock market indices responded to the market’s trend, influenced by the wide-reaching reforms impacting various sectors within the Exchange.
Specifically, the NGX Banking Index surged by 114.90% to reach 897.20 basis points, while the NGX Oil & Gas Index saw a robust increase of 125.54% to hit 1,043.06 basis points.
Additionally, the NGX Industrial Goods Index experienced a growth of 12.86% to reach 2,712.27 basis points.
Commenting on the 2023 stock market performance, Mr. Tajudeen Olayinka, the Chief Executive Officer of Wyoming Capital and Partners, remarked, “The market in 2023 was notably eventful and bullish.”
He said “We saw a market that picked its 2023 position way back in November 2022, when it was obvious that the three leading presidential candidates, namely: Asiwaju Bola Tinubu, Peter Obi and Alhaji Atiku Abubakar, that could succeed former President Muhammadu Buhari, were pro-market.
“And so, the build-up to the bullish run in 2023, that started in November 2022, was a demonstration of market confidence in a private sector-centric president.
“The inaugural speech of President Tinubu, with respect to fuel subsidy removal and exchange rate unification, eventually activated the market-wide pent-up confidence that had always been there but eluded the market ever since.
This market-wide confidence remained throughout the year.” he added
Mr. Tajudeen Olayinka expressed optimism for the Nigerian stock market in 2024, foreseeing a continuation of positive momentum.
Olayinka further stated “And we can draw that from 2024 budget proposal of President Tinubu, where total reliance has been placed on the use of private capital in funding some important developmental projects across the country.
“In a way, we are going to see more public companies get listed on the stock exchange for the purpose of raising new capital, while the existing listed companies will not be left behind in this development.
“So, I see a very bullish and active primary market in 2024, even though, there could be occasional moderation in price movement across the board, as investors take profit and engage in portfolio rebalancing.
“The fact that private sector will take the lead in navigating the economy out of its prolonged state of disequilibrium, we will see a better capital market in 2024.”
Managing Director of ARM Securities Limited, Rotimi Olubi, highlighted that in 2023, the Nigerian stock market demonstrated resilience amid challenges such as global agencies’ downgrades (FTSE and MSCI) and macroeconomic hurdles like persistent inflation, high-interest rates, and foreign exchange losses.
He said “Despite all these, the Nigerian equities market proved to stand strong, hitting historic highs with the NGX All Share Index reaching an unprecedented 70,000 points and achieving an impressive 45.90per cent YtD return, culminating at 74,773.77 basis points by year-end.
“Reforms, notably FX liberalisation and the removal of petrol subsidies, spurred investor optimism, resulting in substantial gains, particularly in the Banking and Oil and Gas sectors. Furthermore, impressive earnings in the face of inflationary pressures and FX losses further boosted investor confidence, contributing to the remarkable market returns,” Olubi added.
Meanwhile, Nigeria’s external reserves plummeted to a six-year low of $32.87 billion by December’s end, as data indicated. The Central Bank of Nigeria (CBN) intervened by selling dollars in an attempt to stabilize the declining naira currency.
A combination of unresolved forwards, unfulfilled assurances of dollar inflows, and a twenty-year high in inflation led to a turbulent period for the naira.
As a result, the currency devalued by over 50%, making it the third worst-performing global currency in 2023. Kyle Chapman, an FX markets analyst at London-based Ballinger & Co, highlighted these challenges.
To support the naira, the CBN depleted its foreign exchange reserves, which had peaked at $47.63 billion in June 2018. By December, the country’s dollar reserves dwindled to a level last recorded in September 2017, standing at $32.16 billion.
Chapman said “The naira’s downwards momentum is likely to continue through much of 2024, and its ultimate trajectory will depend on whether the CBN’s rhetoric transforms into concrete policy moves that drive up the flow of U.S dollars into Nigeria and shore up trust in the official market.”
The Nigeria Deposit Insurance Corporation (NDIC) has announced revisions to the Maximum Deposit Insurance Coverage for banks operating within the country.
NDIC’s Managing Director, Bello Hassan, disclosed the updated coverage benchmarks during a media briefing in Abuja on Thursday.
The coverage for Deposit Money Banks has been increased from N500,000 to N5 million, for Microfinance Banks from N200,000 to N2 million, for Primary Mortgage Banks from N500,000 to N2 million, and for Mobile Money Operators subscribers’ pass-through from N500,000 to N5 million per subscriber.
Hassan underscored that the objective of the update is to enhance depositor safety, foster public trust, promote the inclusivity of financial services, and ensure the overall stability of the financial sector.
More to follow.. . .. .
The 63rd Annual General Meeting (AGM) of the Nigerian Exchange Group Plc (NGX Group), held at the Nigerian Exchange Group House on Monday, April 29, 2024.
During the gathering, the Group concluded on ordinary and special business matters, while also unveiling plans to embark on a comprehensive digital transformation strategy to expand its business operations in line with its overarching strategy.
The meeting’s agenda, approved by the Board of Directors, included the declaration of a final dividend, ratifying the appointment of Temi Popoola as the Group Managing Director/Chief Executive Officer of NGX Group, presenting financial statements to shareholders, re-electing non-executive directors retiring by rotation, authorizing, and disclosing remuneration, among other undertakings.
Notably, the NGX Group, subject to regulatory approval, discussed its authorization on a rights issue to raise capital of up to N10 billion with a subjoined resolution to increase its share capital to sufficiently accommodate the rights issue.
All resolutions were approved by shareholders just as appointment and reelections of directors were ratified.
Following substantial authorization across its agenda, the NGX Group introduced plans to propel the markets with a digital transformation journey that includes an online platform for public offers and deep investments in its technology stack amongst others.
The platform will provide a smarter and efficient way for Issuers to raise capital and enhances the subscription process and operational workflow of POs in the capital market including initial public offerings (IPOs), rights issues and other public offers.
On the development, the Group Chairman, NGX Group, Umaru Kwairanga said, “I am particularly grateful to our shareholders for their assent to the critical business we conducted today. As the Board oversees the strategic direction and gives management the necessary support and guidance, we believe that the coming year will be a better one in terms of value created for our shareholders.
“NGX Group is positioned to capitalize on opportunities amid the positive and forward-looking reforms by the government and our stakeholders should rest assured we will deliver excellently.”
On his part, Group Managing Director/Chief Executive Officer, NGX Group, Temi Popoola, said, “As we complete our 63rd AGM, I extend my sincere gratitude to our shareholders, customers, employees, regulators, and directors for their steadfast support. In a year that underscored NGX Group’s strategic agility and operational excellence, we witnessed growth stemming from our dynamic revenue streams. We are optimistic and well-positioned to forge a future marked by success, resilience, and prosperity.
Addressing the digital transformation agenda, Popoola stated, “The future of our business and the capital markets hinges on technology. That is why we are driving this digital transformation journey across our subsidiaries through the Group. NGX Group’s digital transformation will democratize access to public issuances for every Nigerian with a mobile phone, supporting capital-raising efforts for companies. Additionally, we aim to commercialize our technology solutions and expand our footprint across Africa”.
Key insights and proceedings from the NGX’s AGM can be accessed via the live recording available on NGX Group’s website at www.ngxgroup.com.
. . . Firm Declares N4.5bn Dividend For 2023
The Nigerian Content Development and Monitoring Board (NCDMB) has announced that it had received an interim dividend payment of N450 million out the N1.5bn declared by the Waltersmith Refinery and Petrochemical Company Limited.
The NCDMB made the disclosure on Monday, adding that the payment represented NCDMB’s 30% share in the company for the year ended 2023.
Recall that the NCDMB had in July 2018 invested $10m to acquire 30% stake in the 5000 barrels-per-day (bpd) modular refinery project located at Ibigwe, Imo State, to support the Federal Government’s policy on modular refinery, stimulate investment and create employment opportunities.
Rising from a Board Meeting of Waltersmith Refinery and Petrochemical Company Limited, the Executive Secretary, NCDMB, Engr. Felix Omotsola Ogbe confirmed that a total dividend of N4.5bn had been approved for the year 2023, pending final approval at the Annual General Meeting (AGM).
The company reported a total profit of N23.6bn as profit after tax for the same year.
The Executive Secretary hinted that NCDMB expects to receive additional 30 percent of the outstanding N3bn dividend after the AGM is convened later this year.
He added that the receipt of this interim dividend payment was a testament to the strong performance and profitability of Waltersmith Refinery and Petrochemical Company Limited.
He said, “The NCDMB is proud to be a part of this success and looks forward to continued collaboration with the company in the future.”
He affirmed that the company was upscaling the refinery capacity from 5000 bpd to 10,000bpd and the expansion project was already 44 percent completed and on time to be commissioned by early 2025.
The NCDMB’s investment in the Waltersmith project was also geared to catalyse the industrialisation of the Nigerian oil and gas industry and its linkage sectors and deepen Nigerian Content in the oil and gas industry. It was the first third-party investment embarked by the Board, and it provided proof of concept and paved the way for other successful investments by the Board.
Two weeks ago, NCDMB received a cheque of $1 million from Nedogas Development Company Limited (NDCL), being part of the return on investment (ROI) on one of the Board’s strategic investments.
The cheque was presented by the Chairman of the company, Engr. Emeka Ene when he visited the Nigerian Content Tower in Yenagoa Bayelsa State, where he was received by the Executive Secretary, Engr. Felix Omatsola Ogbe and other members of the Board’s management.
Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company and it culminated in the construction and commissioning of a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.
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