The Nigerian equities market demonstrated exceptional resilience in 2024, achieving significant gains despite persistent economic challenges such as high inflation and rising interest rates.
The market recorded a remarkable N21.845 trillion increase in market capitalization, closing the year with a 37.72% gain despite mixed economic signals that influenced investor sentiment. The Nigerian Exchange’s performance ranked as the second-best among African markets.
The All-Share Index (ASI), the key performance metric of the Nigerian Exchange (NGX), rose from 74,773.77 points at the beginning of 2024 to 102,926.40 points, marking a 37.72% increase. Market capitalization grew from N40.918 trillion to N62.763 trillion, reflecting a gain of N21.845 trillion.
Several sectoral indices contributed to the market’s positive momentum. The NGX Oil & Gas index saw a remarkable 159.81% growth, the NGX Insurance index increased by 107.64%, and the NGX Consumer Goods index appreciated by 52.20% year-to-date (YTD) as of December 27, 2024.
The year began on a strong note, with the bourse surpassing the 100,000-point milestone for the first time in January, driven by positive momentum from 2023 and strategic acquisitions, including Dangote Cement. However, investor focus shifted mid-year toward fixed-income securities due to attractive yields resulting from the Central Bank of Nigeria’s (CBN) aggressive rate hikes.
From January to November 2024, the equity market saw a total of N4.913 trillion in domestic and foreign portfolio transactions. Domestic investors maintained a dominant 83.4% stake, while foreign investor participation rose to 16.6%, driven by increased confidence in government reforms.
The listing of new entrants such as Transcorp Power, Aradel Holdings, and Haldane McCall added N5.1 trillion to the market, further deepening its liquidity and diversity.
Commenting on the market’s performance, David Adonri, Vice President of High Cap Securities, noted that the equities market closed 2024 with a 31.47% gain as of December 30. He highlighted the exceptional growth in the Oil & Gas sector, which surged 160%, followed by the Insurance sector at 92%. The banking sector recorded the lowest growth at 19.4%.
Adonri attributed the Oil & Gas sector’s growth to the deregulation of the petroleum industry and pointed out that aggregate dividends paid by listed companies rose by 118%. Additionally, the ASEM Board recorded the highest growth among various boards, appreciating by 147%.
New capital raised on the NGX in 2024 totaled N5.7 trillion, including contributions from banks’ recapitalization efforts. Adonri emphasized the transformative impact of the NGX’s new public offering portal, which streamlined the distribution of public offerings.
Despite inflation at 34%, equities outperformed with a 37.9% return, while debt securities experienced negative real returns due to the Monetary Policy Rate (MPR) at 27.6%. The Bonds index on the NGX declined, indicating higher aggregate yields compared to the previous year.
Investment Banker and Stockbroker Tajudeen Olayinka remarked that the N21.03 trillion market capitalization gain in 2024 highlights the presence of significant liquid funds among institutional investors. He also pointed to investor confidence in the future prospects of listed companies, which contributed to the market’s resilience despite high-interest rates.
In summary, 2024 was a record-breaking year for the Nigerian equities market, with outstanding growth across sectors, robust investor participation, and innovative technological advancements in market operations.