In 2024, the Nigerian stock market emerged as one of the standout performers globally, with the Nigerian Exchange Limited (NGX) recording an impressive 37% year-to-date (YTD) gain as at December 27.
This strong performance was driven by a combination of resilient market sentiment, foreign portfolio investment (FPI) inflows, and the overall bullish outlook on Nigerian equities, despite a challenging macroeconomic environment.
The NGX market capitalization reached a record N61.91 trillion, marking a N21 trillion gain or a 33.3% increase compared to January 2024.
The total transaction value also soared to N4.91 trillion, reflecting a 51.9% increase from 2023.
The market’s impressive growth has been underpinned by both primary and secondary market activities, with foreign investments doubling in 2024. Notably, Nigeria’s debut Eurobond issuance after two years was oversubscribed by 300%, a clear signal of investor confidence.
Several sectors have experienced notable growth. Companies like Juli Pharmacy, Sunu Assurance, and Oando saw their stock prices surge by 1646%, 717%, and 541%, respectively. Similarly, the oil and gas sector, with companies like Seplat, saw substantial growth, bolstered by strategic acquisitions and positive market dynamics.
However, operators have stressed that sustaining this growth into 2025 requires focused efforts from policymakers, regulators, and market participants. Addressing challenges such as persistent inflation, exchange rate volatility, and high borrowing costs is crucial for the continued development of the NGX.
As regards inflation, the Central Bank’s tight monetary policy raised interest rates multiple times in 2024, which may deter investments in equities in favor of more attractive fixed-income instruments.
To unlock the market’s full potential, experts have called for increased retail participation, enhanced financial literacy campaigns, and the promotion of pension funds, insurance companies, and mutual funds’ involvement in the market. Additionally, policies that encourage multinational companies to list on the NGX will help deepen the market and boost liquidity.
