In spite of the Central Bank of Nigeria retaining the Monetary Policy Rate which is otherwise known as the benchmark interest rate at 17.50 percent for the better part of the first quarter of 2023, the market capitalization of equities listed on the Nigerian Exchange Group rose from N27.915 trillion as of 31 December 2022 to N29.544 trillion on 31 March 2023.
The appreciation amounted to a gain of N1.629 trillion as at the end of the first quarter of the year, representing an average monthly appreciation in the values of the listed equities to the tune of N543 billion.
The bellwether index, the All Share Index of NGX appreciated from 51,251.06 points to 54,232.34 points within the same period, putting the overall market return at 5.8 percent as of 31 March 2023.
Analysts familiar with the Nigerian equity market attributed the appreciation in the values of the listed equities to dividend expectations and the low yield curve in the fixed income market in the first two months of this year.
“Investors are positioning for the dividend season. Based on the available data on the NGX, most of the notable companies on the NGX have started announcing their corporate actions, and shrewd investors will like to benefit from the dividends announced thus far” Omobola Adu, an investment research analyst with Afrinvest Consulting, said, noting that most of the dividends will be paid in April and May, 2023.
He added that from January to February this year, the yield curve in the fixed income market was very low, making it unwise for investors to rejig their portfolios from equities to fixed income instruments.
Although the overall market return was 5.8 percent at the end of the first quarter, some sectoral indices outperformed the market, with some gaining as much as over 40 percent.
NGX Growth Index surpassed expectation with a quarterly return of 55.66 percent, the highest appreciation among the indices during the period. Other indices that recorded double digits growth are NGX Consumer Goods which appreciated by19.32 percent, NGX Premium Index that gained 11.97 percent, as well as NGX Oil/Gas index that returned 10.45 percent.
Some listed stocks were outstanding in terms of price appreciation during the period. The leading advancers are Conoil, 43.4 percent; ABC Transport 48 percent; BUA Foods, 56.92 percent; NNFM, 58.3 percent; Etranzact, 74.76 percent; SUNU Assurance, 79.31 percent; MRS 98.23 percent, Geregu, 116.78 percent; John Holt, 120.83 percent, and Tripple G, 241.77 percent.
Market heavyweights such as Zenith Bank, Dangote Cement, Nestle, BUA Foods, MTN Nigeria, United Bank for Africa, Seplat, Dangote Sugar and Lafarge Africa, among others.
