Despite Global Volatility, Nigeria’s Stock Market Appreciated by N4.15trn in Nine Months

The stock market of the Nigerian Exchange Limited (NGX) maintained its positive momentum in the first nine months of 2022, gaining N4.15 trillion to outshine global markets that have witnessed severe volatility.

The market capitalisation of the NGX had opened in 2022 at N22.297 trillion, gaining N4.15 trillion or 18.63 per cent to close at N26.451trillion as of September 30, 2022.

Also, the NGX All-Share Index appreciated by 14.8 per cent year-to-date (YtD) to 49,024.16 basis points from 42,716.44 basis points the stock market opened in 2022 for trading.

For the global stock markets, the NASDAQ Composite Index has depreciated by -20.95 per cent YtD, while the United Kingdom FTSE 100 – London Stock Exchange – has depreciated by -6.44 YtD performance.

Other notable stock exchanges which have also recorded decline in performance included: the CSI 300 Shanghai Shenzhen -16.91 per cent in YtD performance and LuxX Luxembourg Stock Exchange Index -25.64 in YtD outcome.

However, in the nine months under review, investors in the Nigerian stock market have witnessed double-digit inflation, scarcity of foreign exchange, uncertainty in global economies, and of course, a hike in the Monetary Policy Rate (MPR) to 15.5 per cent.

Investors in the stock market reacted to Central Bank of Nigeria’s (CBN) hike in MPR, leading to the aggressive movement of investors to the fixed income market that comes with low-risk investment and modest yield.

The stock market between June and September witnessed investors’ aggressive profit-taking amid the apex bank’s policy to tackle the steady increase in the inflation rate.

For instance, the stock market in September depreciated by N429 billion or 1.6 per cent month-on-month to N26.451 trillion, from the N26.88 trillion it opened for trading, while the NGX ASI was down by 1.63 per cent to 49,024.16 basis points from 49,836.51 basis points it opened for trading.