Nigerian investors on the Nigerian Exchange Limited (NGX) have reason to celebrate as their wealth soared by an impressive N5.3 trillion in the first half of 2023.
This remarkable surge comes in the face of challenging economic conditions and is a testament to the bold macroeconomic reforms implemented by the new administration.
Despite grappling with rising inflation, social unrest, and global uncertainties, the NGX witnessed a significant market rally, fueled by increased investor interest, particularly in bellwether stocks.
The NGX All Share Index (ASI), a key performance indicator for listed companies, recently achieved a 15-year high, surpassing 60,000 index points and closing at 60,968.27 points.
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This reflects a substantial increase of 8,717.21 points or 18.96% since the market opened on January 3, 2023, at 51,251.06 points.
Additionally, the market capitalization of listed firms rose from N27.915 trillion at the beginning of the year to N33.197 trillion at the end of June 2023, signifying an impressive gain of N5.3 trillion in the first half of the year.
Market observers attribute this positive performance to the new administration’s economic policies under the leadership of President Bola Tinubu.
Key reforms, including the harmonization of exchange rates and the floating of the Naira at the Investors and Exporters window, have bolstered investor confidence and led to the wealth gains witnessed in the market.
These reforms have come as a relief to investors who were initially concerned about the cash crunch, soaring inflation, and uncertainties surrounding the 2023 elections.
Charles Fakrogha, the Chief Relationship Officer at Foresight Securities and Investments Limited, commented on the market’s remarkable performance, saying, “Investors were uncertain about the elections in February, and we saw that the naira redesign implementation flopped badly. Then interest rates were continuously raised by the Central Bank of Nigeria (CBN). Inflation was actually on the minds of investors, but again we saw the smooth transition as well as bold policy statements from President Tinubu on May 29. This has led to the gains and positive sentiments the market is currently experiencing.”
While acknowledging the current market success, Fakrogha emphasized the importance of the new administration moving forward with its plans to stimulate economic growth across various sectors.
He highlighted the need for the government to establish a cabinet and implement its proposed policies to further stimulate activity in the economy and revitalize the capital market.
Temi Popoola, the Chief Executive Officer of NGX, expressed the exchange’s intention to collaborate with the new administration in developing market-friendly policies that promote further market development and attract more listings.
“We are looking to collaborate with the new administration to develop the right policies that promote listings in our market with the support of stakeholders like the Chartered Institute of Stockbrokers (CIS), Association of Securities Dealing Houses of Nigeria (ASHON), Association of Issuing Houses of Nigeria (AIHN) and other,“ he said.