Last year, growth stocks listed on Nigerian Exchange (NGX) Limited appreciated by 41.63 per cent amid improved local investor sentiment and strong corporate earnings.
Addressing investors, analysts and other stock market stakeholders at the NGX 2022 Market Recap and 2023 Outlook last Wednesday, the chief executive of the bourse, Mr Temi Popoola, said the growth index outperformed other indices during the year under review.
According to him, energy equities appreciated in 2022 by 34.05 per cent due to sustained high oil prices and demand in the downstream oil sector, boosting corporate earnings.
He further said the NGX Main Board Index grew by 33.18 per cent on the back of the landmark listing of BUA Foods Plc and the pioneer power sector listing of Geregu Power Plc, which both added over N1 trillion in market capitalisation to the exchange.
“The total turnover of trades in 2022 improved by 27 per cent from N916 billion to N1.16 trillion year-on-year from 2021.
“Market participation was heavily skewed to the domestic investors. Along with other factors, this signalled a good year for the Exchange despite global macroeconomic headwinds,” Mr Popoola said at the event held in collaboration with EFG Hermes.
Speaking further, Mr Popoola said, “On strategic partnerships, we will be forging more with development finance institutions, banks, both local and international, to develop the market further.
“We aim to do more on trading where we improve data dissemination to attract a larger investor base, especially from the retail side.
“We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.”
The CEO also added that the exchange would be increasingly focused on sustainability, noting that, “NGX sees sustainability as not just important but also a profitable frontier of its business, and work is ongoing on developing a framework for certifications in carbon credits trading, pending regulatory approval.
“On the capital market’s digital transformation, the exchange is working on USSD launch in collaboration with telcos and banks, unlocking the African capital markets via payment integration with Afrexim Bank’s Pan African Payment Settlement System.”
In his remarks, the Head of Strategy at EFG Hermes, Mr Simon Kitchen, stated that a major policy shift was needed to catalyse further interest in Nigerian stocks, of which he gave a unified exchange rate and credible fiscal and monetary policies as examples, advising investors to shop for dividend yields in bluechip stocks that offered strong dividend growth.