Impressive Corporate Earnings Lifts NGX Investors Gain by N629bn In November

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The stock market of the Nigerian Exchange Limited (NGX) appreciated by N629 billion in November 2021, on the back of investors’ renewed interest in listed high-mid capitalised and undervalued stocks on the bourse.

Analysis of market performance for November revealed that the market capitalisation of listed equities on the NGX appreciated by 2.9 per cent or N625billion to close on November 30, 2021, at N22.567 trillion, up from the N21.938 trillion the market opened for trading this year.

Consequently, the NGX All-Share Index also appreciated by 2.9 per cent or 1,209.45 basis points from the 40,270.72 basis points it opened at the beginning of 2021, to 43,248.05 basis points.

Year-Till-Date (YtD), the stock market gained N1.5trillion from N21.063trillion the stock market opened in 2021 to close November 30, 2021 at N22.567trillion.

Similarly, the NGX ASI has gained 7.4 per cent or 2,977.33 basis points to 43,248.05 basis points as at November 30, 2021 from 40,270.72 basis points it opened this year.

The stock market in 2021 has been confronted with foreign investors’ exit, double-digit inflation rate that discourage investment as well as movement of liquidity to money market instruments.

Capital market analysts noted that inflation rate at double-digit between January and November of 2021 contributed to investors dumping the equities market for money market instruments.

The market capitalisation also lost a total of N1.297 trillion in the first half (H1) of 2021 to N19.760 trillion as investors moved to fixed income instrument.

The exchange had stated that the global economy is projected to stabilize in 2021 and consolidate on growth made in the second half of 2020, albeit, below pre-pandemic levels.

“This is hinged on the distribution of a COVID-19 vaccine, persistent social distancing, rekindling economic activities, and increased consumer demand. We expect the marginal reopening of businesses, normalization of the economy and revenue-diversification drive of the Nigerian government to elicit positive sentiments throughout the year.

“Our growth expectations should be noted with caution, as the recent second wave of Covid-19 in Nigeria and globally, may slowdown renewed social and economic activities.”

A stockbroker and capital market analyst, Mr. Rotimi Fakayejo attributed the oil and gas index performance growth to impressive corporate earnings posted by listed petroleum marketing companies, stressing that the enactment of the Petroleum Industry Act also played a critical role in lifting the index higher in the 10 months under review.

On his part, Managing Director, Highcap Securities Limited, Mr. David Adnori, attributed stock market to impressive listed companies’ nine months corporate earnings and improved macroeconomic conditions.

According to him: “The rising price of crude oil also increased demand for stocks on the NGX. The growth may extend to year-end as most Q3 results are fantastic. “The rebound in the stock market is expected to extend till year ended because of steady increase in global oil prices. The recovery of the stock market could have been better but insecurity in the nation’s led to hike in inflation rate and investors have to react negatively.”

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