Nigerian Stock Market Soars to 15-Year High, as Dangote, Rabiu, Otedola, Others Pocket Billions

Nigerian Stock Market Soars to 15-Year High, as Dangote, Rabiu, Otedola, Others Pocket Billions

  • The Nigerian stock market has reached a new level as investors' confidence grows on the back of reforms
  • Nigerian billionaires Aliko Dangote, Abdulsamad Rabiu, and Femi Otedola reaped substantially from the latest market surge
  • Experts explained to why the market posted a very strong performance in the last week of August

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The Nigerian stock market all share index (ASI), which measures the overall performance of equities, has hit its highest level since 2008.

Data from the Nigerian Exchange showed that the ASI rose by 0.51% to 66,490.34 basis points on Tuesday, August 29, 2023, from 66,151.38 recorded the previous day.

Nigerian stock market performance
Nigerian stocks have risen since President Bola Tinubu introduced several reforms. Photo credit: George Osodi
Source: Facebook

The last time the Nigerian stock market's ASI crossed 66,000 was 15 years ago, on March 5, 2008.

The index has also returned 29.7% since the beginning of the year, Punch reports. This implies that investors in Nigerian equities have earned about N8.3 trillion in capital gains this year.

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Also, checks by show that on Tuesday, the NGX Market capitalisation (the total value of all shares) climbed to N39.7 trillion from the N36.2 trillion reported in the previous session.

This represents a N185.51 billion gain for investors after eight hours of trading on Tuesday.

Top five gainers on Tuesday

  • Flour Mills - 10% appreciation, closing at N33.
  • Champion Breweries - 10% increase, ending trade at N3.19.
  • NASCON - Rose to N54.10, a 10% gain.
  • Dangote Sugar - Went up by 10% to N57.45.
  • NAHCO - Climbed 10% to reach N22.10.

Top five losers on Tuesday

  • CWG - Leading the losers, declined 10% to close at N4.05.
  • Linkage Assurance - Shed 10% to end trade at N0.90.
  • Chellarams - Fell to N3.57, losing 9.9%.
  • Prestige - Slid to N0.46, experiencing a 9.8% depreciation.
  • UPL - Closed at N2.15, marking a 9.7% decrease.

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Expert explains the market activity

Speaking on the market returns, Abdulrauf Bello a Team Lead, Investment Research and Advisory WSTC Financial Services Limited, noted that while there is excitement that the market is overperforming, in true context, the mega stocks are really the driving factors.

He said:

"In tracing the source of the market returns, attribution can be performed to identify where they originate. Firstly, in the case of oil and gas, the drivers are evident, including Conoil, MRS, and others. We are all aware of what happened here: fuel subsidy removal.
"As for the consumer goods sector, a few names dominated the rest. It began with BUA Foods, which has fundamentally been performing exceptionally well. More recently, Dangote Sugar and Nascon have also shown strong growth."

Also speaking, Johnson Chukwu, CEO of Crowry Assets added that the market has done well in the first eight months of the year.

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He explained

"It is important to note that the market is yet to reflect the true state of Nigeria's economy. The stock market rally is largely driven by market performance rather than the overall economy.
"The positive financial results of Guaranty Trust Bank and Fidelity Bank boosted investors' confidence in the last week of August, this is why the market saw major gains in the same week the esults were released.
"This is because stock investors anticipate more positive financial results from other banks and companies and rushing stocks to earn more."

Dangote Cement claims top spot, MTN follows on list of 10 most valuable companies in Nigeria

Meanwhile, in another report, revealed that Dangote Cement has emerged as the most valuable company in Nigeria by market capitalisation as of the end of July 2023.

According to data from the Nigerian exchange, Dangote cement overtook telecom giant MTN, which occupied the top spot in the previous month.

Investopedia defines Market capitalisation as how much a company is worth as determined by the stock market. It is calculated by multiplying the number of outstanding shares by the current market value of one share.


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