The NGX All-Share Index increased by 1.3% to reach 60,000 index points on Tuesday, June 27, 2023, as equity trading on the NGX ended the day in positive territory.
The ASI has not risen to this level in more than 15 years. Investor sentiment has remained upbeat as the market applauded several of President Bola Tinubu‘s economic choices, particularly the modifications to Nigeria’s foreign exchange operational framework.
It is not surprising that the capital market, which serves as the economy’s barometer, is performing well given that President Bola Tinubu’s economic policies, known as Tinubunomics according to Nairametrics, look to be having an impact on Nigeria’s economy.
Market Performance
According to available statistics obtained by Nairametrics, the equities market on Tuesday closed with capital gains of N421 billion.
The All-Share Index (ASI)- the barometer that measures all share prices at the Nigerian Exchange (NGX), continued its winning streak as the benchmark index gained 1.30% to settle at 60,108.86 points, the highest point in over a decade (precisely 5 March 2008 when it was 66,381.20).
Gains in MTNN (+2.77%), Zenith Bank (+4.62%), and GTCO (+5.20%) buoyed the broad market’s strong performance.
As a result, the year-to-date (YTD) return rose to 17.28%, while market capitalization gained N421.19 billion to close at N32.73 trillion.
A review of today’s market activity revealed that trade turnover was lower than it had been during the previous session, with a 4.01% decrease in transaction value.
9,463 transactions involving a total of 763.70 million shares worth N12.53 billion were completed. With 111.67 million units exchanged, Access Holdings (+3.61%) led the volume chart, and GTCO (+5.20%) led the value chart with transactions totaling N2.69 billion.
Operators’ Comments
Olatunde Amolegbe, a former president of the Chartered Institute of Brokers (CIS) and managing director of Arthur Steven Asset Management Limited, claimed that the president of the CBN’s start of the cleanup effort was the primary motivator.
He noted that market operators now expect that the reforms in the monetary and forex policy will lead to an inflow of foreign portfolio investment in the market.
“This was the main driver of the market. The changes at the CBN should lead to changes in the monetary and forex policies which are expected to increase foreign participation in the market.
Recall that the previous policies of the CBN had hitherto led to a sharp drop in participation by foreign portfolio investors from 65% in 2015 to less than 10% in 2022. The new reform will lead to an increase in appetite by this class of investors in our market,” he said.
Group Executive Director, Investment Banking, Cordros Capital, Mr. Femi Ademola, said the markets appeared to have suffered significantly from the regulatory flip flops of the CBN in the past few years.
According to him, the regular interventions in the market and the deluge of circulars and policy actions from the apex bank had resulted in volatility in the market.
He noted that the implementation of the recent naira redesign policy affected the market quite negatively and pitched the populace against the CBN Governor.
Stocks snap 4-year losing streak: Nigerian stocks seem on track to snap a 4-year losing streak for the month of June.
Stocks are currently up 7.78% in June and look set to close the month positively after going four years on a losing streak.