23/01/2024
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This short write up is addressed to some Nigerians in the diaspora; it’s a deliberate attempt in prompting them towards something that they might have neglected completely. It’s important we take advantage of the current challenges which our country is facing and use it to our benefits.
Despite a high rate of inflation and an unstable and unfavorable Naira exchange rate, it is important to note that the Nigerian economy seems to be doing well in certain areas. In actuality, there is an economic boom in the Nigerian stock market, where investors are not only realizing previously unheard-of financial gains but also stand to get previously unprecedented dividends on their investment.
The All Share Index which tracks the general market movement of all listed equities on the Nigerian exchange was 51,251.06 as at 4th Jan, the beginning of 2023 and 55,738.35 on 30 May 2023, a day after Tinubu was sworn in. By July it rose to 65,091. As reported by Bloomberg on November 1, the day the ASI first broke 70,000, it however reached its highest level ever on December 24, at 73,768.
The index jumped to 94,538.12 at the close of trade on Friday, January 19, marking a growth of more than 69 percent since last May and setting yet another enormous milestone. Market capitalisation also grew exponentially from N30.3 trillion recorded at end of May 2023 to N51.7 trillion on 19 January 2024. That implies that since Tinubu took power, investors have made more than N20 trillion in gains.
The record profits declared by several Nigerian banks, beginning from their second quarter reports, when they reported huge gains from their forex dealings. UBA’s earnings per share stood at N10.95 in H1 2023 from N1.98 per share in the same period of 2022, Zenith announced earnings per share in H1 at N9.29 from N3.55 in the same period of 2022. The market went into even greater excitement after the strong Q3 data, as banks revealed even higher gains in profits. In response, investors snapped up bank shares, driving up their prices higher.
UBA Plc at the beginning of 2023 was traded at N7.60 has experience the biggest jump in its stock price. By last Friday, its price closed at N31. FBNH was N10.90, is now N26.60. Access Bank which started the year at N8.50, has soared to N30. GTCO and Zenith that were N23 and N24 are now trading in N44.10 and N44.30 respectively, Fidelity Bank is now N13 from N4.35. Others like Stanbic, FCMB, Sterling, Wema, Unity and others have all experienced the rise in prices.
Likewise, several of the manufacturers, such as Transcop Hotel, Dangote Cement, BUA Cement, Dangote Sugar, Eternal Oil, Nahco, Nascon, MRS, NNFM just to mention few, experienced upsurge in prices. Transorp Hotel moved from N6.25 at the beginning of 2023 to N100 this last Friday, Dangote Cement from N261 to N538.80, BUA Foods from N65 to NN240, Nascon N11.10 to N70.50, MRS N14.10 to N126 and Geregu N149 to N469.70. Others that can be crossed checked are Nahco, AirtelAfri, BUA Cement, Conoil etc.
EDC Securities Research states that as earnings season approaches, investors are buying "fundamentally driven stocks," which is driving up stock prices. Investor opinion and expectations seem to be that a windfall in dividends is imminent.
In spite of other economy challenges the country is going through, the Nigerian Stock Market has surpassed the MSCI Emerging Markets Europe, Middle East and Africa Index to become the greatest in the world thanks to the market's historic growth. It should come as no surprise that investors are flooding the market with cash. Only last Friday 19th January saw 15,255 deals involving 844.4 million units of stocks valued at N15 billion.
As you can see, so many investors are smiling to the bank in spite of all the current challenges Nigerians are facing; you don’t need to follow the crowd, there are so many fake information carrier out there, pay attention. There are still positive things happening in Nigeria. Take advantage. What exactly is the advantage am talking about, the exchange rates favours Nigerians in the diaspora currently, use the opportunity to build up your stocks investment, as you know one of the advantage of share is it's liquidity, it can easily be turned into cash unlike other assets. Take Advantage.
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