Nigerian Capital Market Sustains Growth, AS-Index Gains 36.66% In 2024

“The Nigerian equity market saw a significant 39.84 percent growth in the first quarter of 2024, rising from 74,773.77 to 104,562.06. The NGX market capitalization increased from N40.917 trillion in January 2024 to N59.487 trillion in the first quarter, representing 44.49 percent.”

BY CHINYERE OBIORA

The adoption of technology, especially digitalization of public offerings and rights issues, has continued to encourage the participation of the youths in the nation’s Capital Market which witnessed lots of development that placed the sector above many others during the year 2024.

Though the Market started the year on a positive note, it recorded negative performance in the second and third quarters of this year. The cheering news is that it eventually joined a growth trend in the fourth quarter of 2024.

Notwithstanding the persistent economic challenges in the country during the year, it was interesting that the Market sustained its growth profile in the month of December 2024.

Overall, capital operators indicated that the problem of high inflation, insecurity, depreciating exchange rate, increase in the pump price of petrol, and the introduction of a windfall tax that affected sectoral performances, all combined to impact the Market activities during the year under review.

However, despite all these setbacks, the nation’s Capital Market showed impressive growth within the year, outpacing most African peers in Year-to-Date (YTD) performance.

Importantly, the NGX All Share Index (ASI) increased by 27,412.26 basis points or 36.66 percent to close on December 24, 2024, at 102186.03 points from 74773.77 points it opened for the year while the market capitalization of listed equities went up by N20.523 trillion or 50.16 percent as of 24th December 2024.

According to the Managing Director of Arthur Stephens Management Limited (ASML), Mr Olatunde Amolegbe, the Nigerian capital market is a key driver of economic growth, offering a platform for mobilizing capital, facilitating investments, and fostering wealth creation.

He said in 2024, the Market experienced notable developments shaped by regulatory changes, technological adoption, and macroeconomic factors as 2025 beckons, adding that understanding the successes, challenges, and emerging opportunities is essential for unlocking its full potential in the coming years.

Speaking on the performance of the capital market in the year, Amolegbe said the NGX-ASI grew by 36.66 percent from 74,773.77 on December 29, 2023, to 102186.03 as of Tuesday, December 24, 2024, even as he noted that this growth was driven by robust earnings from blue-chip companies and supportive government policies.

Amolegbe, who addressed the issues in a presentation titled; “Unlocking the Potential of the Nigerian Capital Market: Challenges and Opportunities Contribution”, stated thus; “The Nigerian equity market saw a significant 39.84 percent growth in the first quarter 2024, rising from 74,773.77 to 104,562.06. The NGX market capitalization increased from N40.917 trillion in January 2024 to N59.487 trillion in the first quarter, representing 44.49 percent.

“This growth was significantly influenced by new listings, such as Transcorp Power Plc, which added N1.8 trillion to market value upon listing. However, the second and third quarters experienced modest corrections, with declines of -4.31 percent in the second quarter and -1.50 percent in the third quarter. This was driven by economic challenges, including high inflation, a depreciating exchange rate, and the introduction of a windfall tax that affected sectorial performances, particularly within the Banking sector.

“Profit-taking and rising interest rates that redirected investments to fixed income securities and that despite the smaller decline in the third quarter, investors remain cautiously optimistic.

“The S&P 500 Index gained 27.58 percent year-to-date (YTD), while the NASDAQ Composite showed stronger growth with a 34.3 percent YTD gain, driven by the technology and AI sectors’ resurgence. The NGX All-Share Index recorded a 31.74 percent YTD gain, supported by strong sectoral performances in industrial goods, insurance, and banking.

“The Financial Times Stock Exchange and Johannesburg Stock Exchange (FTSE/JSE) All Share Index (J203) recorded a 13.31 percent YTD gain, led by strong performance in small-cap and fledgling indices, which experienced a 29 percent growth.

“The Nigerian capital market demonstrated impressive growth in 2024, outpacing most African peers in YTD performance but trailing the JSE in total market size. The U.S. market continued its dominance, with its capitalization dwarfing other global markets and strong performances from technology stocks leading the rally”.

The presentation further stated that; “The NGX-30 Index posted a strong 30.7 percent YTD growth, driven by a robust first quarter but moderated by mid-year corrections NGX Pension Index achieved a 32.0 percent YTD gain, despite minor second quarter setbacks. NGX Banking Index faced significant volatility, with a steep – 19.37 percent decline in the second quarter limiting its 15.6 percent YTD growth.

“NGX Insurance Index outperformed with an exceptional 67.3 percent year-to-date growth. The Industry has benefited from the general drive to reprice premium rates upwards and the persistent naira devaluation as foreign currency-denominated premiums are bloated upon translation to Naira.

“The FMDQ Debt Market grew to N78.97 trillion as of December 6, 2024, suggesting a robust presence in debt instruments including bonds, treasury bills, and other fixed-income securities.

“The NGX’s market capitalization as of Friday, December 20 stood at N61.303 trillion, which represented the total market value of all publicly traded firms on the exchange. The NGX plays a key role in the equity market, accounting for 43 percent of the total market size.

“The NASD OTC Securities Exchange, which provides unlisted securities, recorded a market capitalization of N1.06 trillion, with a 1 percent contribution. The Nigerian Exchange (NGX) also introduced a USSD platform (*5474#) to improve capital market access, allowing investors to track stocks, obtain price information, and communicate with brokers in real-time. This highlighted the initiative’s ability to democratise investment access and enhance financial literacy.”

In his intervention, the Director General, Securities and Exchange Commission (SEC), Emomotimi Agama said; “The introduction of fintech platforms in the market has further simplified access to investment opportunities, driving financial literacy and inclusion.

“Today, numerous retail investors actively participate in the Nigerian capital market, and we are committed to growing this participation”.

He said the Capital Market’s role also extends to State governments, offering a sustainable avenue for financing projects.

For him; “Sub-nationals like Lagos and Ogun states, among others, have leveraged bond issuances to fund infrastructure, education, and healthcare projects.

“These bonds not only enable states to execute developmental projects but also foster accountability and transparency, as market discipline demands robust reporting and monitoring mechanisms.”

On his part, Chief Executive Officer of Marble Capital Ltd (MCL), Dr Akeem Oyewale, is backing policies that facilitate youth participation in the capital market.

He said bringing the youth into the capital market will bring long-term financial growth, job creation as well as innovation.

Expressing the need to adopt technology like Fintech to improve accessibility and efficiency in the market, Oyewale said utilisation of digital platforms and social media to reach and engage the youth audiences.