from OKORO CHINEDU in Lagos, Nigeria
Nigeria Bureau
LAGOS, (CAJ News) – THE Nigerian Stock Exchange (NGX) has extended its lead over its main rivals on the continent following the inauguration of President Bola Tinubu in May.
It has outpaced, for example, the Johannesburg Stock Exchange (JSE) in South Africa and Kenya’s Nairobi Stock Exchange (NSE).
The NGX’s remarkable 25,3 percent year-to-date (ytd) return has significantly surpassed the 7,8 percent by JSE and 5,9 percent drop by NSE.
The NGX has gained roughly 15,4 percent since the president’s inauguration. .
“The president’s announcement of policy reforms, including the elimination of fuel subsidies, lifting of restrictions on the forex market, and the floating of the naira, struck the right chord with investors, contributing significantly to the stellar performance of the NGX,” stated the FBN Quest.
The market watcher noted the NGX’s rally was supported by impressive gains in various sectors, with notable increases of 65 percent, 35 percent, and 21 percent in the oil and gas sector index, banking sector index and the industrial sector, respectively.
Among the notable gainers were several large-cap stocks, such as Total Energies Nigeria, Seplat, Dangote Cement and MTN Nigeria, in that order.
Banks’ performance has been influenced by the high-interest rate environment, which has positively affected their net interest margin.
“Additionally, the banks significantly benefited from expectations of substantial forex revaluation gains following the downward adjustment of the naira exchange rate,” FBN Quest stated.
Nonetheless, the naira depreciation has negatively impacted the second quarter results of the non-financials, with most of them reporting sizable forex losses on their outstanding foreign-denominated loans.
NGX is forecast to deliver double-digit returns this year, possibly outperforming FBN’s 15 percent forecast return for 2023.
– CAJ News