The value of annual transactions in Nigerian shares rose to N2.88 trillion in 2022; the highest level in a decade, as both domestic and foreign investors raised their holdings by around 51.9%. According to The Nation’s Market Intelligence, total equities turnover at the Nigerian Exchange (NGX) in 2014 was N2.884 trillion, which was 7.8 percent more than the second-highest turnover value of N2.676 trillion from the previous year and increased by 51.87 percent over the N1.899 trillion recorded in 2013.
As the market waits for the official release of trading and primary data the following week, independent data research and analysis by The Nation’s Market Intelligence revealed that in 2022, the equities market experienced its second-largest annual percentage growth in a decade, rocketing to a 10-year high of N2.884 trillion.
The stock market increased by 68.3% in 2017, becoming its third-best performance in ten years after falling steadily to a three-year low in 2016.
From N2.051 trillion in 2013 to N2.676 trillion in 2014, the transaction value on the Nigerian stock exchange increased by 30.47 percent. In 2015 and 2016, it fell successively to N1.906 trillion and N1.511 trillion. The market increased to N2.543 trillion in 2017 before declining in the following years to N2.404 trillion and N1.928 trillion, respectively.
In 2020, the trading value in the stock market increased by 12.45% percent to N2.168 trillion, but it decreased by 14.2% percent the following year, to N1.899 trillion. Mr. Kehinde Hassan, Chief Operating Officer of GTI Capital, stated that the increase in turnover during a year in which the market produced a return that ranked among the best in the world was another sign of investor interest in Nigerian stocks.
He claims that given that turnover normally has a moderating effect on pricing trends, a positive correlation between price increase and turnover demonstrates a surprising underlying bullish feeling. He said that domestic investors were responsible for the increase in market activity and expressed hope that greater domestic participation will deepen the Nigerian market and protect it from the extraordinary volatility brought on by external factors.
All parties must continue to be dedicated to the market’s development, he said, adding that the government should use its budgetary policies to encourage market expansion. Investors had a net capital gain of more than N4.45 trillion at the end of 2022 on the Nigerian stock market. Nigerian stocks had used a strong year-end surge to secure their place among the top 10 best-performing stocks in the world, while the global stock market was having its worst performance in more than a decade.
With a full-year average return of 19.98% and a net capital gain of N4.455 trillion, the benchmark index for the Nigerian stock market ended 2022 with a positive return. This was the third year in a row when a notable bullish run continued. Nigerian stocks ended 2021 with an average return of 6.07 percent, or N1.278 trillion in net capital gains. Nigerian stocks experienced an average return of 50.03 percent in the throes of the COVID-19 pandemic in 2020, translating to net capital gains of N6.483 trillion.
In comparison to its initial index of 42,716.44 points in 2022, the All Share Index (ASI), a common value-based index that tracks share prices at the NGX, concluded 2022 at 51,251.06 points, reflecting an average return of 19.98%. With major developed and emerging world markets closing at their lowest levels in recent years, the performance of the Nigerian market defied the overall, generally negative trend. In 2022, the MSCI All-Country World Index experienced a negative return of -20%, mirroring double-digit declines in North America, Western Europe, and East Asia. The S&P 500 Index and the NASDAQ in the US saw average returns of -19.44% and -33.10%, respectively. The Dow Jones Industrial Average fell by 8.78%, highlighting the bearish collapse of the American stock market.
The broad European market index STOXX 50 returned -11.74 percent. The FTSE 100 in the United Kingdom saw a small increase of 0.91 percent. The DAX in Germany fell by 12.35 percent, the CAC 40 in France fell by 9.50 percent, and the NIKKEI in Japan fell by 9.37 percent. The total market value of listed securities at the NGX increased from N22.297 trillion at the beginning of 2022 to N27.915 trillion at the end of the year, a gain of 25.2% or N5.62 trillion. The large-cap listings by BUA Foods Plc and Geregu Power Plc were among the new primary listings that took place throughout the year that contributed to the disparity between the ASI and aggregate market value growth rate.
According to sectoral research, the Nigerian market’s performance was fueled by pervasive optimism in all industries, particularly among large and mid-cap companies in the oil and gas, industrial products, banking, and telecommunications sectors. With a return of 34.05 percent, the NGX Oil and Gas Index took the lead. Following closely behind with an average gain of 19.67% was the NGX Industrial Goods Index. A meager 2.81 percent return was reported for the NGX Banking Index.
The 30 biggest stocks on the exchange are tracked by the NGX 30 Index, which saw a return of 6.98 percent. The NGX Pension Index, which measures equities that adhere to stricter investing criteria for pension funds, soared with an average gain of 10.37 percent, while the NGX Lotus Islamic Index, which follows businesses that follow Islamic finance regulations, concluded with an average return of 7.69 percent. While this was the case, the NGX Insurance Index and NGX Consumer Goods Index both had declines of 11.99% and 0.6%, respectively.