Nigeria’s stock market capitalization rises 5.5% in July 2023

Investors’ capital gain in Nigeria’s stock market witnessed a 5.5% Month-on-Month (MoM) rise or N1.8 trillion in July 2023, as the market capitalization on the Nigerian Stock Exchange Limited (NGX) surged to N35.011 trillion from N33.197 trillion in June.

However, the 5.5% gain indicates a slower growth in investors’ returns compared to the 9.3% or N2.8 trillion gain recorded in the previous month of June.

The positive earnings from some companies and the monetary policy reforms, including the unification of the naira exchange rate, attracted foreign investors to the market, contributing to the July gain. Additionally, gains by blue-chip companies across various sub-sectors played a role in the market’s performance.

The NGX All Share Index (ASI) also experienced significant growth, closing the month at 64,337.52 points, representing a 5.53% rise from the end of June 2023, which stood at 60,968.27 points.

However, the Year-to-Date (YtD) return declined to 25.5% from the 26.9% recorded at the end of June.

Analysts predict increased bargain-hunting activities on the bourse in the coming month due to mixed economic data, the Central Bank of Nigeria’s contractionary monetary policy commitments, potential positive corporate earnings, and possible interim dividend declarations.

In contrast, bearish trends dominated the bourse in recent transactions, with the ASI falling by 1.1% to close at 64,337.52 points. This decline was driven by selloffs in MTN Nigeria (down 3.7%), Dangote Sugar (down 10.0%), and Ecobank Transnational Incorporated (ETI) (down 10.0%).

Among the sectors, four indices experienced losses, while two indices gained. The Banking and AFR-ICT Indices led the laggards, declining by 2.6% and 1.9%, respectively, due to selloffs in ETI (which declined by 10.0%), UBA (down 3.5%), and MTN (down 3.7%). However, Custodian Investment’s buy interest led to the rise of Mansard Insurance (up 10.0%) and Conoil (up 8.6%), pushing the Insurance and Oil & Gas Indices higher by 1.4% and 0.6%, respectively.