Report reveals NGX second-best performing market in three months

Iben Ejikeme Business 02/09/2023

Over a three-month period in 2023, which included June, July, and August, the Nigerian Exchange Limited (NGX) emerged as the second best-performing exchange in Africa.

African Markets, a website that tracks the success of African exchanges, reports that the Ghana Stock Exchange (+22.84%) came out on top, followed by NGX (+19.33%) and Malawi Stock Exchange (+15.79%).

This information was provided in a statement released by the NGX on Friday, which noted that the rating coincides with worries about rising interest rates, skyrocketing inflation, dismal macroeconomic indicators, and a decline in foreign direct investment.

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The dominance of the local investors in the market has since pushed the All-Share Index to a 15-year high of 66,490.34 basis points on Tuesday as it crossed 66,371.20 earlier recorded on the exchange on March 5, 2008.

Also, in August, the market cap gained N1.4trn on the back of strong positive sentiments. The market cap had opened at N35.011tn and closed the month at N36.422tn.

On the other hand, the ASI which is the broad index that measures the performance of Nigerian stocks, opened August at 64,337.52 basis points and closed August at 66,548.99 signalling a gain of 2,211.47 basis points or 3.44 per cent.

Cordros Research in their Market review and outlook for financial markets titled; Veering from the watershed point, stated that the equities market resilience reflects heightened investor optimism for domestic growth with the new administration’s promulgation of long-needed policies.

The report said that the implementation of policy reforms, accommodative monetary policy and resilient corporate earnings have so far supported buying activities in August.

“Even though foreign investors are expected to stay on the sidelines as long as FX illiquidity issues persist, its baseline expectation is that the market will deliver a positive return of 25.8 per cent in the full year of 2023,” Cordros report stated.