₦airaland Forum

Amidst turbulent economic challenges, Nigeria’s stock market has demonstrated remarkable resilience, posting impressive gains that underscored investor confidence and market vitality.

Precisely, with just one trading day left to the end of the first nine months of 2024, the Nigerian stock market has gained N15.66 trillion as investors continued to invest in blue-chip companies.

The double-digit inflation rate, unstable foreign exchange market, soaring Monetary Policy Rate (MPR), among other macroeconomic challenges could not deter investors as they continued to take advantage of the opportunities the stock market offers.

The Nigerian economy has witnessed inflation that moved from 28.92 per cent as at December 2023 to 32.15 per cent as of August, while the naira exchange rate against the dollar closed on Friday at N1,637.69/$.

Also, the Central Bank of Nigeria (CBN) has increased the MPR by 850 basis points to 27.25 per cent from 18.75 per cent last year with a focus on moderating inflation.

Despite these challenges, the overall market capitalisation of the Nigerian Exchange Limited (NGX) as of September 27, 2024, closed at N56.578 trillion, which was an increase of N15.66 trillion or 38.27 per cent when compared to the N40.918 trillion it closed for trading at the end of 2023.

In addition, the NGX All-Share Index (NGX ASI), an indicator that tracks the general market movement of all listed equities on Exchange, including those listed on the Growth Board, regardless of capitalisation closed on Friday, at 98,458.68 basis points, about 31.7per cent average investors return from 74,773.77 basis points the stock market closed for trading 2023.

The reported 31.7 per cent Year-till-Date (YtD) gain in NGX ASI meant the Nigerian stock market was one of the best Exchanges in Africa, ahead of Johannesburg Stock Exchange, and Egypt Stock Market.

Analysts also argued that some reforms by the federal government and the CBN played a critical role in the stock market performance in nine months. Specifically, they noted that reforms in the foreign exchange market, and hikes in MPR impacted trading in the fundamentals of companies listed on the Exchange and contributed to foreign investors’ uptick in the market.

Foreign investors’ participation in the stock market stood at 18.86 per cent as of August 2024 when compared to 9.22 per cent, reducing domestic investors’ dominance to 81.14 per cent as of August 2024 from 90.78 per cent as of August 2023.

The aggressive foreign investors’ participation impacted on highly capitalised stocks such as Dangote Cement Plc, and Airtel Africa Plc, among others that triggered the N15.66 trillion market capitalisation in nine months of 2024.

As at September 27, 2024, the share price of Dangote Cement closed at N532 per share, an increase of 66.3per cent from N319.9 it closed in 2023, while Airtel Africa closed at N2,200 per share as of September 27, 2024, about 17per cent hike from N1,887.00 per share it closed 2023.

The gain in Dangote Cement, among others stocks, impacted on the NGX Industry Index that closed September 2024 at 3,847.83 basis points, a growth of 42per cent from 2,712.27 basis points it opened for trading 2024.

Also, the ongoing banking sector recapitalisation as directed by the CBN, coupled with impressive 2024 half year corporate earnings also influenced investors’ decisions in taking positions in banking stocks.

For instance, Guaranty Trust Holding Company Plc recently completed a N400.5 billion public offer which saw its stock price at N47.4 per share as of September 27, 2024, about 17per cent increase from N40.50 it opened for trading.

The contribution of this stock impacted on NGX Banking Index which increased to 933.79basis points as of September 27, 2024, 4.1per cent YtD growth from 897.2basis points it closed 2023.

THISDAY further gathered that reforms in the Oil and Gas sector was also driving the NGX Oil & Gas Index performance. With the gain in Seplat Energy Plc to N4,103.10 per share as at September 27, 2024 from N 2,310.00 per share it opened this year, the NGX Oil & gas Index closed September 27, 2024 at 1,990.84 basis points, representing an increase of 91per cent from 1,043.06basis points

Commenting on the stock market performance in the first nine months of 2024, the Vice President, Highcap Securities Limited, Mr. David Adnori, argued that investors were trading based on sentiment.

He stated that the emergence of President Bola Tinubu further energised the stock market, arguing that market participants have hope in his ability to rejig the economy and implement economy-friendly policies.

Adnori, however, was optimistic that the stock may maintain its positive momentum on the backdrop of banking sector recapitalisation and expected positive first half 2024 corporate earnings to be released by banks to further strengthen the performance of the bourse.

Amid the hike in MPR to 27.25 per cent, capital market experts stated that its impact has created sentiment trading among investors who see the fixed-income market as an alternative investment opportunity to hedge against double-digit inflation.

Investment Banker & Stockbroker, Mr. Tajudeen Olayinka, stated that the N15.66 trillion market capitalisation gain in nine months of 2024 tells us the presence of huge liquid funds in the hands of institutional investors who currently dominate activities in the stock market.

“It also holds the fact that the future is bright for some of the listed companies, hence, investors are positioning their portfolios for that brighter future. This is also the reason the market remains resilient in spite of the high interest rate regime,” he said.

On the stock market projection for the rest of the year, he said, “It is going to be more of a balanced market, with investors exercising their rights to additional shares and/or taking new shares to maintain a balance.”

The federal government of Nigeria on Thursday unveiled the dualisation of the 1,068 kilometres of road in the Illela local government of Sokoto State.

The road which starts from Illela town of Illela Local Government in Sokoto, is expected to pass through seven states of Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos states respectively, was awarded to Hitech Construction Company Limited.

President Bola Tinubu, who was represented by the governor of Sokoto State, Ahmed Aliyu, described the projects as very dear to his heart.

The governor in his remarks commended the Minister of Works, Senator David Umahi, for his commitment in bringing the projects to reality.

He also commended Tinubu for choosing a man of his word and a dedicated person as his minister for works.

While appreciating the president for the construction of the road, the governor assured that his administration will ensure that there is adequate security for personnel working on the road to ensure its speedy completion.

“We the people of this state, we are indebted to the President for his continuing support to our people from distribution of fertilizers to the food palliatives for our people, ” he said

The governor also commended the President for giving the state an additional ministerial slot, which he said is part of his love for the people of the state.

Aliyu also commended the President for dealing with insecurity in the state since the directives were given to the Minister for the state for Defence, which he said has contributed in no small way to the security of the state.

He said the people of the state will give the President more votes than expected in 2027 general elections to ensure he returns to office and continues his good work.

Also speaking, the Minister for works, David Umahi, said the flag off of the road is one of the four legacies projects which is over 3,000 kilometers of road by the current administration.

“Let me tell you that this project, the Northern territory has 52 per cent while the entire South has 48 per cent.

“When we assumed office in 2023, we inherited over 2,000 kilometres of road and Mr President is committed to delivering all the roads,” he said.

He said the Sokoto – Badagry road project was first initiated by President Shehu Shagari about 48 years ago, and has six-lanes which will enable it to have low traffic jams.

Abubakar also called on the federal government to work with the governors of each of the states to cooperate in the speedy completion of the road, while assuring that he will monitor the progress of the road himself.

He further called on the federal government to make provision for railway transport from Sokoto to Lagos, “since 2015, we have been demanding for this, we deserve railway transportation in this state and I will continue to disturb Mr President on it.”

In his remarks, the Minister for Budget and National Planning, Atiku Bagudu, described the road as a very important road for the people of the country.

He said, “We are in Illela to flag off the Illela to Badagry super highway, which is a promise kept by Mr President and part of his renewed hope agenda.

“Nobody demanded Illela to Badagry road or Lagos – Calabar superhighway , but it was out of the desire of Mr President to improve on our infrastructure in the country.

“Mr President is a believer in the country and he is proving to Nigerians that his interests and desire is to improve on the infrastructure development of the country.”

The Minister further commended Tinubu for his developmental plans while assuring him that the people of Sokoto and Kebbi States will forever remain grateful to him.

Also speaking, the former Governor of Kebbi State and Senator representing Kebbi Central, Senator Adamu Aliero, said the road was first initiated about 48 years ago.

He said the road will be a game changer for travellers from Sokoto to Lagos, as it will also improve the economy of the country.

Aliero, further appealed to President Tinubu, to consider railway construction from Ilella to Lagos to further contribute to the development of the country.

He however assured that the Senate will continue to give adequate support to complete not only the Illela to Badagry road but all other legacy projects embarked upon by the Tinubu-led administration.

The Minister for the State for Works, Bello Goronyo, said the Sokoto – Badagry road is so dear to the heart of President Tinubu and he is committed to bringing it to reality.

He said the road will improve the economic development of the country as more jobs will surely be created with the road.

In his remarks, the Minister for Budget and National Planning, Senator Atiku Bagudu, described the day as a very important day for the people of the country.

“We are in Illela to flag off the Illela to Badagry super highway, which is a promise kept by Mr President and part of his renewed hope agenda.

The Minister further commended Tinubu for his developmental plans while assuring him that the people of Sokoto and Kebbi States will forever remain grateful to him.

Also speaking, the chairman Senate Committee on Works, Senator Adamu Aliero, said the road was first initiated about 48 years ago.

He said the road will be a game changer for travellers from Sokoto to Lagos, as it will also improve the transportation sector.

Aliero, further appealed to Tinubu to consider railway construction from Sokoto to Lagos to further contribute to the development of the country.

“The potential is immense: With 563 million chickens, 58 million cattle, 124 million goats, 60 million sheep, and 16 million pigs, Nigeria is the leading livestock producer in West Africa. Yet, despite this vast resource, we face stark realities.

“It is about time that we do it right. A country of over 200 million people and cannot serve our children one pint of milk in a classroom per day? That is not right.”

“We didn’t see the investment opportunities. We didn’t see the economy of livestock in the past. Now that we have seen it, we must work together to restart the sector.”

“The long-term neglect of the livestock sector has weighed heavily on the country's import bills, with milk and dairy products accounting for $1.2-1.5 billion.

“Yes, we can do it. We can bring prosperity to our people. We can feed our children. From grass, we can achieve grace. We can contribute so much to the Gross Domestic Product (GDP) and provide decent jobs.”

President Bola Ahmed Tinubu
24th October, 2024.

Nigeria is set to benefit from Germany’s ambitious €4bn investment in green energy projects across Africa by 2030.

This was disclosed in a statement by the Director of Media and Corporate Communications at the National Space Research and Development Agency, Dr Felix Ale, on Tuesday.

Ale shared the insights following the German Federal Foreign Office H2 Diplo Study Tour, during which Nigeria’s Minister of Innovation, Science, and Technology, Chief Uche Nnaji, emphasised the strategic importance of this collaboration.

“Nigeria is making a bold move in its energy transformation by positioning itself to benefit from Germany’s €4 billion commitment to green energy projects across Africa by 2030”, Nnaji said.



He said, “This initiative is fully aligned with President Bola Ahmed Tinubu’s Renewed Hope Agenda, which emphasises economic diversification, job creation, and sustainable development—key pillars of his 8-point plan to revitalize Nigeria’s economy.”

The minister added that the engagement with Germany was built on fruit discussions between the president and the Chancellor of Germany.

“Our engagement with Germany builds on the fruitful discussions between President Tinubu and Chancellor Olaf Scholz, which resulted in a landmark €500 million renewable energy and gas deal,” Nnaji stated.

Nnaji revealed that the discussions involved key representatives from German ministries, including the Federal Ministry of Research and Education and the Federal Ministry for Economic Cooperation and Development.

“These stakeholders are pivotal in advancing the green hydrogen initiative, a clean and renewable resource poised to decarbonize industries and enhance energy security in Nigeria,” he added.

The minister noted that Green hydrogen often likened to the oil and gas of the future, presents vast economic opportunities.

He revealed that Germany plans to import green hydrogen from Nigeria as part of its efforts to achieve carbon neutrality by 2045.

“As Germany aims for carbon neutrality by 2045, it plans to import green hydrogen from partners like Nigeria, underscoring the strategic significance of this collaboration.

“This partnership not only supports President Tinubu’s goals of innovation and industrial growth but also positions Nigeria as a leader in the global green hydrogen market”, Nnaji noted.

By adopting advanced technologies and creating a conducive business environment, Nnaji highlighted that Nigeria aims to attract substantial foreign direct investments, generate employment, and expand its energy export capabilities.

He added, “The potential for Nigeria to export green hydrogen to Europe and beyond enhances its leadership role in Africa’s green energy landscape and solidifies its status as a vital partner in Germany’s energy transition.”

Here are the gains Nigeria has achieved and what the President Tinubu-led government has been able to actualize from the removal of Fuel Subsidy among other ongoing reforms in the country...

Economic Gains:

1. Reduced Fiscal Burden: Subsidy removal freed trillions of Naira enabling investment in critical sectors.
2. Increased Revenue: The Federal Government now collects full revenue from fuel sales, bolstering its finances.
3. Improved Macroeconomic Stability: Reduced subsidy expenditure helped stabilize the economy, lowering inflation and interest rates.

Investment Gains:

1. Attracted Foreign Investment: Subsidy removal made Nigeria's oil sector more attractive to investors, sparking new investments.
2. Private Sector Participation: The removal of subsidy has encouraged private sector involvement in the oil industry, driving growth and efficiency.
3. Increased Economic Activity: Subsidy savings invested in infrastructure and social programs stimulated economic growth.

Transparency and Accountability Gains:

1. Reduced Corruption: Subsidy removal eliminated opportunities for corruption and rent-seeking.
2. Improved Governance: Enhanced transparency and accountability in government spending.
3. Better Resource Allocation: Funds redirected to priority areas like healthcare, education, and infrastructure.

Energy Sector Gains:

1. Market-Driven Pricing: Subsidy removal allowed market forces to determine fuel prices, promoting efficiency.
2. Increased Refining Capacity: Encouraged investment in domestic refining, reducing import dependence.
3. Diversified Energy Mix: Subsidy savings invested in renewable energy sources, promoting diversification.

Social Gains:

1. Improved Healthcare: Subsidy savings invested in healthcare infrastructure and services.
2. Enhanced Education: Increased funding for education, improving access and quality.
3. Infrastructure Development: Subsidy savings invested in roads, bridges, and transportation.

Environmental Gains:

1. Reduced Smuggling: Subsidy removal decreased fuel smuggling, reducing environmental pollution.
2. Encouraged Cleaner Energy: Investment in renewable energy sources promotes cleaner energy and reduced carbon emissions.

Overall:

1. Monthly allocations to many states and local governments have increased significantly, with some getting up to 40% increase.

2. Nigeria has successfully paid billions of inherited debts from several administrations.

3. Hundreds of billions have been allocated to the revolutionary Students Loan and Consumer Credit Schemes.

4. Landmark infrastructures are currently going on across the country, with existing roads and railways getting completed and new ones such as Lagos-Calabar highway moving at incredible pace.

5. Nigeria’s foreign reserves has increased from $34bn in 2023 to $39bn in October 2024.

6. ⁠The debt to revenue ratio has dropped drastically from 97% in 2023 to around 64%.

7. ⁠Fuel consumption has dropped drastically from 66 million litres daily to 25 million liters, signifying a massive reduction in smuggling to nearby countries.

8. ⁠Payment of debts owed to gas companies has resulted in massive improvements in electricity generation from 4300MW to 5500MW.

9. Over 1 million MSMEs have benefited from N50,000 grants.

10. The minimum wage has been increased from N30,000 to N70,000

These gains demonstrate the positive impact of fuel subsidy removal on Nigeria's economy, energy sector, and society.

It has been a challenging year so far, but it must be said that so much progress has been made in the bid to reposition the economy for a sustainable future.

Nigeria attracted $5.97 billion investments in the first half of 2024, according to a capital importation report by the National Bureau of Statistics (NBS) on Tuesday.

The report indicated that total capital importation into the country stood at $2.6 billion in the second quarter. But this is a 22.85 percent decline from $3.38 billion recorded in the first three months of the year.

“In Q2 2024, total capital importation into Nigeria stood at $2,604.50 billion, higher than $1,030.21 billion recorded in Q2 2023, indicating an increase of 152.81%.

“In comparison to the preceding quarter, capital importation declined by 22.85% from $3,376.01 million in Q1 2024,” NBS said.

Investments into Africa’s biggest economy has been waning as businesses grapple with currency volatility, rising inflation and energy cost.

To attract badly needed investors, the Central Bank of Nigeria (CBN) has remained aggressive in its approach as it raised benchmark interest rates to 27.25 percent.

These rate hikes which is hurting local businesses operations are yet to bring in the desired results in terms of investments.

According to the report, portfolio investment ranked top with $1.4 billion, accounting for 53.93 of total foreign inflows, while other investments recorded $1.1 billion, accounting for 44.92 percent.

“Foreign Direct Investment recorded the least with $29.83 billion (1.15%) of total capital importation in Q2 2024,” the Abuja-based state agency said.

The banking sector recorded the highest inflow with $1.12 billion. This represents 43.15 percent of total capital imported in Q2 2024.

The production and manufacturing sector recorded $624.71 million while the trading sector value stood at $569.22 million.

Nigeria had the highest capital importation in Q2 from the United Kingdom with $1.12 billion, showing 43.01 percent of the total capital imported.

Netherlands and South Africa also contributed to the inflows.
However, only three states recorded capital importation with Lagos receiving the highest, making the state the top investment destination in the country.

“Of the three states that recorded capital importation during the quarter, Lagos state remained the top destination with $1,367.84 billion, accounting for 52.52% of the total capital imported.

“Abuja (FCT) followed with $1,236.64 billion (47.48%), and Ekiti state with $0.0003 million,” the report stated.