For Chinwendu Obienyi

The Fiscal year 2022 will never be quickly forgotten as it brought several new developments to the Nigerian capital market amid multiple monetary policy rate (MPR) adjustments, high inflationary pressure, foreign exchange (FX) shortage and political tension.

The Nigerian stock market posted its best performance in 2021 (50 percent), sparking renewed optimism among investors that 2022 would be better.

The Daily Sun’s analysis of market activities for the year under review revealed that NGX’s All Share Index (ASI), which tracks the general market movement of all listed shares, opened the year at 42,716.14 points and closed at 51,251.06 points, which represents an increase of 19.98 percent compared to the 6.07% registered in 2021.

Furthermore, its market capitalization, the total value of all shares listed on NGX, increased by N5.619 billion from N22.296 billion to N27.915 billion, representing a profit of N5.619 billion.

As a result, so far this year, the performance of all sector indices has closed largely positive.

For example, NGX Oil and Gas emerged as the best performing sector after gaining 34.60 percent, followed by NGX Industrial Goods (+19.67 percent), NGX Pension (+5.38 percent), NGX Banking (+5.84 percent) and NGX 30 (+5.38 percent), while NGX Consumer Goods (-0.15 percent) and NGX Insurance (-12.34 percent) were the laggards.

Over the year, some of the top stocks that did well include PZ (+86.07% y/y), Guinness (+77.69% y/y), Airtel Africa (+71.20% y/y), Fidelity Bank (+70.59% y/y) and Seplat (+69.23% y/y), while some of the laggards include Honeywell Flour (-31.18% y/y), Nestlé (-29.33% y/y), Unilever (-20.00% y/y), Nigerian Breweries (-18.00% y/y) and GTCO (-11.54% y/y).

But the aforementioned actions came as a result of some initiatives, such as the listing of BUA Foods, Geregu Power, the induction of 133 new authorized trading employees, the launch of the revised capital market plan, and the SEC approval of the listing rules of the NGX technology board, among others. In addition, the accommodative interest rate environment led to interest buying amid low yields on fixed income instruments. These developments helped boost market activities.

listings

Beginning the year, BUA Foods listed a total of 18 billion common shares at N40.00 per share in the NGX FMCG sector, under the trading symbol BUAFOODS. The listing of the shares added N720,000,000,000 to NGX’s market capitalization, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.

Commenting on the inclusion, Abdul Samad Rabiu, Chairman of BUA Group, said: “I am delighted that another member of BUA Group has been included in the NGX. This demonstrates our commitment to national economic growth and support for the nation’s drive for food security in line with global sustainability goals.

We appreciate the continued support of our shareholders’ financial advisors, brokers, suppliers, customers, consumers and staff members. In particular, we appreciate our host communities with whom we continue to build very strong and mutually beneficial relationships.”

Likewise, Dangote Cement Plc successfully executed the second tranche of its share repurchase program on January 19 and 20, 2022. Tranche II of the program involved the repurchase of 126,748,153 share units, representing 0.7 percent percent of the fully paid common shares of the company. at an average price of N276.89.

Furthermore, CBN’s approval of the payment services bank’s licenses for the two listed telecom players – MTN Nigeria and Airtel Africa – sparked a positive reaction in the market.

A total of 2.5 billion common shares of Geregu Power Plc during the year traded at N100 per share, in the Utilities and Power Generation sub-sectors of NGX, under the trading symbol GEREGU.

Geregu Power, a leading Power Generation Company (GenCo) in Nigeria, was the first GenCo to be listed on the NGX Main Board, a listing segment for well-established companies with demonstrable records of achievement.

Geregu’s share listing added N250 billion to NGX’s market capitalization, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.

Reacting to the development, Geregu Power Chairman Femi Otedola stated that the company’s listing was the actualization of a vision to bring world-class standards in governance, sustainability and business processes to the company and the Nigerian power sector. adding that the inclusion in the Main Board of NGX would guarantee the long-term growth of the company and its benefits would be passed on to its shareholders.

new business employees

In February 2022, NGX onboarded a total of 133 authorized trading employees from 63 business licensees, charging them with upholding the highest level of ethics and responsibility.

Speaking at the ceremony, NGX Chief Executive Officer, Mr. Temi Popoola, said that NGX was pleased to celebrate the success of the Dealing Clerks.

He noted that the induction was proof of years of dedication, adaptability and hard work, and symbolizes his commitment to upholding the highest ethical standards and always putting the interest of the marketplace first. Popoola also advised new hires to embrace the culture of continuous learning in the fast-paced environment and the ethical standards of brokers.

Revised capital market master plan

As part of ways to accelerate the growth of the nation’s capital market and increase the participation of domestic and foreign investors, the Securities and Exchange Commission (SEC) released a revised capital market master plan in November 2022.

Its Director General, Lamido Yuguda, stated that the Master Plan is designed to chart a strategic direction while providing clarity of vision and a solid roadmap necessary to facilitate innovation, investment, growth and expansion of empowerment opportunities. in Nigeria and beyond. He said:

Yuguda said: “Our vision is “To be the most modern, efficient and internationally competitive market in Africa catalyzing the economic growth and development of Nigeria. We believe the plan provides a strong roadmap to achieve this vision as we collaborate with other stakeholders to drive its implementation effectively.”

Rules for listing on the NGX Technology Board

The Securities and Exchange Commission (SEC) approved in December the Rules for listing on the NGX Technology Board.

NGX Technology Board is a specialized platform for technology-based companies to list and raise capital on the Stock Exchange. Through the Board, NGX aims to encourage investments in tech-inclined indigenous and other companies in Africa, bring greater visibility to these companies, and ultimately deepen the Nigerian capital market.

Commenting on the approval of the Rules, NGX Chief Executive Officer Temi Popoola said the approval was a landmark achievement that will position the Exchange as an attractive destination for capital formation by companies within the Technology Sector.

“We are confident that the NGX Technology Board will encourage start-ups, both of Nigerian origin and from other African countries, to go public as they work to meet their financial needs,” he said.

Stakeholder reaction

Reacting to the performance of the Nigerian stock market, market traders said the positive performance is an indication of a modest recovery, having surpassed this closing figure once over the course of the year.

NGX Limited Chief Executive Temi Popoola said that despite global macroeconomic challenges and volatility, he described NGX’s performance as a fantastic year.

He said: “We have also seen several record listings in equities and fixed income, including BUA Foods and Geregu Power, which have played a key role in driving growth in the market this year.”

Also speaking, Wyoming Capital and Partners CEO Tajudeen Olayinka described the market’s performance as “exceptional” and stated that the market responded to the shocks and recovered from the shocks in 2022.

“Although market performance in 2022 was mixed, I think we can attribute the final closing figure to the usual market fatigue that typically accompanies prolonged stock price revision across all markets and instruments and we can also see that returns real in the fixed income space has closed in the negative in 2022. Therefore, whenever market prices are out of context or out of the acceptable range, especially when prices have become too low to resist, there is a price recovery, and that’s what we’ve been seeing since the last MPC meeting in November which produced an interest rate hike of 16.5 percent.

Another important factor is the usual bargain hunting that usually precedes the financial year-end rally, as many of the publicly traded companies have their financial year-end on December 31st. Therefore, bargain hunters are starting to take positions ahead of investors who would normally like to profit from year-end dividend payments.

Clearly, it takes two to tango. In summary, the market responded to the shocks and recovered from the shocks in 2022. However, this does not mean that the market cannot suffer a setback in 2023, given the many headwinds that are expected to naturally accompany the transition. from a government that has pursued a dominant approach for about the last 8 years, to a new government that will likely shift its focus to private sector dominance,” Olayinka said.