NGX All-Share Index records 33.81% growth in H1 2024 amid economic challenges 

This exceptional performance stands as a milestone in NGX’s history, defying prevailing economic challenges such as elevated inflation, a depreciating exchange rate, and persistent security concerns. 

The prevailing optimism manifested in discernible shifts in purchasing behaviour, culminating in the All-Share Index closed the half year at 100.057.49 index points by the end of the half year. 

Moreover, the year-to-date (YTD) return of the NGX All-Share Index shows its resilience, standing at an impressive 33.81% despite recent bearish trends seen in Q2 of the year. 

However, the equities market recorded mixed performances in the first two quarters of 2024 which made up the first half of the year.  

The first quarter saw an impressive return of 39.84%, driven by strong company earnings, and positive dividend announcements and also propelled by the listing of Transcorp Power Plc, a subsidiary of Transcorp Plc on the NGX. 

The company listed 7.5 billion shares at N240.00 per share by introduction on the Main Board of the Nigerian Exchange (NGX). 

The power generation company’s listing boosted the overall NGX market capitalization by N1.8 trillion, just as its shares rose by 10% on the first trading day. 

The market positive sentiment among investors during the quarter was also attributed to several factors, including favourable policies introduced by President Bola Tinubu’s administration such as the removal of fuel subsidies, streamlining of exchange rates and the floating of the naira. 

By contrast, the second quarter experienced a decline, with returns falling to -4.31% as of the close of the last trading day of June 28th.  

The sharp drop in the index was influenced by several policy announcements from the Central Bank of Nigeria (CBN). Notably, the CBN announced a new recapitalization plan for commercial banks, aiming to raise an estimated N4 trillion in fresh capital over the next two years.  

The downturn was largely attributed to the higher interest rate environment, which has driven investors towards fixed-income securities, putting downward pressure on market performance. 

Market performance 

Experts’ review  

The Managing Director, of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe in an exclusive chat with Naijaonpoint said that the expectation that the government policies will encourage the inflow of foreign investment was the primary trigger that is caused the stock market rally in Q1. 

Amolegbe added said that a demographic shift has happened in the NGX in the last few years.  

Amolegbe added said that a demographic shift has happened in the NGX in the last few years.  

“We now have more local institutions and retail investors in the market than foreign portfolio investors. The reverse used to be the case, this shift has naturally reduced volatility in stock prices as the locals are likely to have more faith in the local market than foreigners,” he said.  

By contrast, in the second quarter, the Managing Director, of Crane Securities Limited, Mr. Mike Eze in a chat with Naijaonpoint attributed the downturn to investors capitalizing on profits following the monetary policy rate hike of 26.25% from 24.75%.   

He said with the further hike, investors will navigate towards the fixed income space because there is no sentiment when it comes to investment.