The Chief Executive Officer of Nigerian Exchange Limited (NGX), Temi Popoola, recently expressed optimism about the positive response from investors to the recent policies implemented by the Federal Government since the inauguration of President Bola Tinubu.
Popoola’s remarks came during a recent interview on BBC News’ “NewsDay” program, where he discussed the bullish sentiments currently prevailing in the Nigerian stock market.
Since President Tinubu’s policy statements on May 29, 2023, the Nigerian stock market has experienced a notable shift in sentiment.
Popoola highlighted the prolonged periods of bearish sentiments endured by equity investors on the NGX.
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However, with the introduction of the new administration’s audacious macroeconomic reforms, the market has witnessed a significant turnaround.
The first half of the year concluded on a positive note for the Nigerian stock market, with the NGX All-Share Index (ASI) surging by 18.9 percent to close at 60,968.27 points.
This milestone marked the index’s highest level in 15 years, a feat not achieved since March 5, 2008, when it stood at 66,381.20 points.
Investors have reaped substantial gains from the market’s resurgence, with their wealth increasing by N5.3 trillion in the first half of the year.
Popoola attributed this impressive performance to the new administration’s commitment to implementing ambitious economic policies, which have effectively reversed the previous five-year bearish cycle.
“In the past one month, there has been a change in administration and I would say a couple of things have happened. There has been a material change in policy management. We have gone from an unorthodox approach to something more orthodox, more traditional. This has engendered a lot of hope and I think the financial markets responded in a very positive fashion,” he said.
The CEO also added that the liberalization of the FX market has transformed the economy.
“So in the past, there has been scarcity of FX and this liberalization policy has started to resolve that. So, we expect that our corporates can run more efficiently which means that they can be more profitable in markets like ours.
We had a gap between the official rate and the parallel market in the past. This has normalized now and there is increased propensity by foreign investors to bring money into Nigeria and that of course helps the general FX situation. The country is now open to foreign capital and what this does is to transform and improve the economy”.
While emphasizing the cyclical nature of the market, Popoola expressed positivity on the likelihood of the bullish sentiment lasting for the long term.
“Overall, we are very hopeful and optimistic that this trend continues for the long term. These are the sort of policies that markets and investors like as they are able to plan better, forecast effectively, and so generally we are very hopeful and optimistic.”