• Returns 283.45% Since 2020,
• As Market Cap Soars N49.97tr On Geregu, TransPower, Aradel, BUA Foods Listing

By Kingsley Ighomwenghian

Despite shedding 222.95  basis points or 0.2% on Tuesday, just before the Nigerian Exchange Limited (NGX) closed trading for the year 2024, the Nigerian market gained a cumulative 37.65%, closing at 102,926.40bps, staying above inflation thereby ensuring a positive real rate of returns.

Rising consistently over recent months, Nigeria’s inflation rate closed at  34.60% in annual term at the end of November, according to data by the country’s National Bureau of Statistics (NBS. Analysts at Lagos-based investment and research firm Afrinvest Research project that inflation could slowdown to 34.5 percent in December, while those at Bismarck Rewane’s Financial Derivatives Company Limited expect it could settle at 35 percent in the period.

This surge in average stock prices (the benchmark index), the NGX noted in a statement, marked a remarkable turnaround, breaking away from the poor performance of the 2015–2019 years in the aftermath of the 2015 oil price crash which was followed by a recession in 2016.
The nation’s market, the NGX continued, turned the corner in the 2020s with unprecedented growth, with the benchmark index delivering a stellar 283.45% return, climbing from 26,842.07bps at the end of 2019 to 102,926.40bps at the end of December 2024.

It identified standout years as 2020, 2023, and 2024, as years when investors sought higher real returns from equities amid negative yields in the fixed-income markets.

Market capitalisation (investors’ worth), the sum of the value of all listed equities on the exchange, equally did not disappoint over the five year period, soaring from N12.79 trillion at the end of 2019 to N62.76 trillion on Tuesday, December 31, 2024, representing a meteoric increase of N49.97 trillion.

The NGX identified fresh listings that helped to propel the growth in capitalisation during the period to include: Geregu Power Plc, Transcorp Power Plc, Aradel Holdings, and BUA Foods. Also on Monday, December 30, 2024, the NGX also formally admitted 20,706,894,542 ordinary shares of 50 Kobo each allotted from the Rights Issue Nigerian Breweries Plc at N26.50 each on its Daily Official List. This raised the company’s total paid up shares to 30,983,026,920 ordinary shares of 50 Kobo each.

These high profile listings are are believed to energized trading activities, further broadening the range of blue-chip stocks available for trading on the exchange.

This performance, the NGX believes, was boosted by the depreciation of the Naira, driven by macroeconomic reforms by the Central Bank of Nigeria (CBN) and the Federal Government. Foreign capital inflow, it continued, increased steadily, rising from a low of 4% in mid-2023 to an average of 16% by November 2024.

Speaking at the Closing Gong Ceremony to end the 2024 trading activities, NGX’s Chief Executive Officer, Jude Chiemeka, represented by the Head of Trading and Products, Abimbola Babalola, said “the year 2024 witnessed significant activity in the secondary market, a testament to the efforts of our trading license holders. Complementary macroeconomic fundamentals were instrumental, and we appreciate the impactful policy making by the CBN and the Federal Ministry of Finance.

“We also commend the Securities and Exchange Commission for its effective oversight, especially during the smooth banking recapitalization process,” he added, appreciating the efforts of key stakeholders, such as the stockbroking community, represented by the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON).

Also speaking at the event, CIS President and Chairman of Council, Oluropo Dada, and ASHON Chairman, Sam Onukwue, represented by the 2nd Vice Chairman, Mrs. Ify Rita Ejezie, emphasized the pivotal role of stockbrokers in driving capital market growth. They reiterated their commitment to advocating for policies that enhance market development.

Despite the impressive growth, challenges remain.

For example, analysts at Proshare Nigeria in their 2025 market outlook lamented how Nigeria’s capital market continues to grapple with high transaction costs, information asymmetry, monetary tightening, low trading volumes, and wide bid-ask spreads, all of which stifle liquidity.

However, the report underscores the potential of leveraging the equity market through the listing of national assets, such as NNPC Limited, to unlock liquidity and stimulate domestic and foreign investment.

Proshare’s counterparts at Coronation Asset Management in their report, however sounded more optimistic, noting that 2025 could be a more stable for the Nigerian economy than either 2023 or 2024.

Since mid-2023, the report recalled that the monetary authorities and the Federal Government have implemented policies to tackle inflation and to stabilise the currency.

“The effects of these policies have not been immediate. Inflation has risen from 28.20 percent year-on-year in November 2023 to 34.60 percent year-on-year in November 2024. The Naira, whose US dollar value fell 49.1% in 2023, has fallen by a further 41.0% in 2024, as of 27 December. The performance of such metrics demands patience from those suffering their effects,” it noted.

On his part, Temi Popoola, Group Managing Director/Chief Executive of Nigerian Exchange Group, while reflecting on outgone year, said “Nigeria’s capital market has proven itself as a hub of resilience and innovation, consistently offering valuable opportunities for investors.

“The strong performance of our blue-chip companies over the past decade has been a key driver of returns, even amid challenging economic cycles. Inflationary pressures have made equities an attractive hedge, and strategic new listings have significantly boosted market activity,” he added.

Highlighting the transformative impact of policy reforms, he noted how “macroeconomic shifts, particularly in the oil and gas sectors and currency devaluation, have been transformative.”

These changes, coupled with the liberalization of exchange rates, he believes, “have enhanced operational efficiency and contributed to the robust performance of listed companies. As we approach 2025, we remain optimistic that continued reforms and a stable macroeconomic environment will sustain growth, boost liquidity, enhance investor confidence, and deliver long-term value for all market participants.”