The Nigerian stock market in 2024 witnessed growth trajectory, despite the nation’s economic headwinds. In this report AMAKA IFEAKANDU looks at some factors that contributed to its outstanding performance within the year.
The Nigerian stock market has defiled the nation’s economic challenges experienced in 2024, closing the year in a remarkable growth profile.
The NGX All Share Index posted growth of 28157.67 basis points or 37.65 per cent to close the year at 102926.40 points from 74773.73 points it opened in January 2024.
The market capitalization which opened with N40.917 trillion appreciated by N21.846 trillion or 53.39 per cent to close the year at N62.763 trillion.
The market within the year under review reflected a mix of highs and lows , as the equities market passed through periods of strong growth and temporary corrections.
Quarterly performance
An analysis of the transactions during the year showed that the local equity market saw a significant 39.84 per cent growth in first quarter 2024, rising from 74,773.77 to 104,562.06. The NGX market capitalization increased from N40.917 trillion in January 2024 to N59.487 trillion in the first quarter, representing 44.49 per cent.
The market took negative direction in the second quarter of the year ending June, dropping by N2.519 trillion or 4.26 per cent to close at N56.691 trillion from N59.120 trillion it opened in the begining of April 2023.
In the same vein, the NGX ASI depreciated by 4504.57 basis points or 4.31 per cent to 100057.49 points from the level traded the preceding quarter.
In the third quarter, the market sustained negative growth, dropping by N34 billion, indicating a drop of 0.06 per cent to close at N56.635 trillion from N56.601 trillion it opened for the quarter while ASI also went down by 1498.70 basis points to 98558.79 points from 100057.47 points it opened for the quarter.
The low performance in the second and third quarters were as a result of economic headwinds, including persistently high inflation, a weakening naira, and a newly introduced windfall tax that affected the banking sector.
The policy decisions by the Central Bank of Nigeria, such as a recapitalization plan requiring commercial banks to raise fresh capital over two years to meet their capital base , and a high-interest rate environment,
shifted investor focus from equity market to fixed-income securities, thereby affecting stocks performance within the period.
The market rebounded in the fourth quarter, posting a 5.56 per cent gain to close at 102926.40 points from 97506.87 it opened for the quarter thereby strengthen investors confidence. The positive sentiment was driven by new listings, recapitalization efforts, and strategic initiatives by listed companies.
Factors that drive the equity market
Several factors contributed to the exceptional performance of the domestic equities market in 2024. A major contributor was the increase in new listings and fund raising activities facilitated by the Nigerian Exchange Limited (NGX), which saw an impressive N8.1 trillion worth of shares listed between January and November. This inflow of capital was driven by 20 companies, including 10 financial institutions and two breweries, seeking to expand and strengthen their financial positions.
In the banking sector, the Central Bank of Nigeria’s (CBN) revised capital requirements—mandating N500 billion for internationally authorized banks and N200 billion for national banks, among others—pushed financial institutions to raise capital through various avenues such as public offers, rights issues, private placements, and listings by introduction. These strategic moves positioned banks to meet regulatory thresholds while enhancing their growth potential.
The brewery sector also played a pivotal role, with Nigerian Breweries Plc and International Breweries Plc leveraging equity markets to reduce debt exposure and enhance financial flexibility. These measures not only bolstered their balance sheets but also positioned the companies for sustained business expansion.
Major listings further boosted market momentum. Aradel Holdings Plc reposition itself in the market with the introduction of N3.05 trillion worth of shares, while Transcorp Power Plc added N1.8 trillion to the Exchange through its listing. Also, Haldane McCall Plc contributed with the introduction of 3.12 billion shares valued at N11.99 trillion These substantial additions to the exchange not only elevated market capitalization but also encourage investor interest and confidence in the market’s potential.
The federal government policy reform also played a major role in shaping the market’s success. The favorable regulatory environment created a supportive backup for market activities, attracting both domestic and foreign investments. These reforms shows the government’s commitment to fostering economic stability and growth, as well solidifying the equities market’s resilience in a challenging economic environment.
Operators views
Stakeholders in the nation’s capital market admitted that the local equities market witnessed a significant growth in 2024, with the NGX All Share Index (ASI) recording exceptional performance despite economic headwinds.
Group Managing Director /Chief Executive Officer of Nigerian Exchange Group, Temi Popoola said Nigeria’s capital market has proven itself as a hub of resilience and innovation, consistently offering valuable opportunities for investors. The strong performance of our blue-chip companies over the past decade has been a key driver of returns, even amid challenging economic cycles. He highlighted the transformative impact of policy reforms: “Macroeconomic shifts, particularly in the oil and gas sectors and currency devaluation, have been transformative. These changes, coupled with the liberalization of exchange rates, have enhanced operational efficiency and contributed to the robust performance of listed companies. As we approach 2025, we remain optimistic that continued reforms and a stable macroeconomic environment will sustain growth, boost liquidity, enhance investor confidence, and deliver long-term value for all market participants.”
A financial analyst Mr Ifeanyi Chigbo said that though the ASI did not reach the growth levels recorded in 2023, the delayed year-end rally—attributed to procedural delays in public offers and capital verification issues with the Central Bank of Nigeria (CBN)—demonstrated the market’s adaptability.
He said that domestic investors played a very important role in stabilizing the market, ensuring sustained activity.
He said 2024 has been a year of resilience for the Nigerian stock market.
Chigbo noted that positive performances in equities and debt markets shows the growing confidence in Nigeria’s capital markets, adding that as technology continues to enhance market operations and domestic participation remains strong, the stage is set for sustained growth in 2025, even as challenges persist.
He said that some sectors standout among the others , adding that the Oil and Gas sector which surged by 160 per cent was driven largely by the deregulation of the petroleum industry, the Insurance sector followed with a 92 per cent increase, while the Banking sector, achieved a 19.4 per cent rise.
He stated that the aggregate dividends paid by listed firms contributed to a 118 per cent increase compared to 2023, signaling robust corporate performance. He said the ASEM Board led the pack with a remarkable 147 per cent growth.
He explained that the year recorded a significant activity in the Primary Market, with N5.7 trillion in new capital raised across various asset classes on the Nigerian Exchange Limited (NGX). Public offerings by banks during their recapitalization efforts impacted positively on the good performance of the market during the year.
“He said the deployment of a new public offering portal by NGX revolutionized the distribution process, making it the process easier and a game-changer for the market.
Proshare’s 2025 market outlook
Despite the impressive growth, challenges remain. According to Proshare’s 2025 market outlook, Nigeria’s capital market continues to grapple with high transaction costs, information asymmetry, monetary tightening, low trading volumes, and wide bid-ask spreads, all of which stifle liquidity. However, the report underscores the potential of leveraging the equity market through the listing of national assets, such as NNPC, to unlock liquidity and stimulate domestic and foreign investment.
The Managing Director APT Securities and Funds Limited, Malam Garba Kurfi said that the depreciation of naira from N1000 to a dollar to as higher as N1600/N1700/$ pushed most of stock prices to appreciate as higher as 900 per cent, 1000 per cent and above.
He said Tantilizer which traded at N0.20 per share moved up and closed at N2.03 per unit He said many stocks such as Oando , Total, Conoil, FLOURMILL, WAPCO among many others, gained more than 100 per cent within the year.
He stated that the rising of MPR to 27.50 per cent ensured that many banks declared hugest profits such as GTBANK and Fidelity, among others.
He said with positive performance in 2024 it is expected that in 2025 the market will sustain growth trend with the expectations of the inflow of fund and increase in participation of foreign investors.
He, however, said that the recapitalisation of insurance companies will impact positively on the performance of the Sectors as it did to Banking Sectors during fund raising for recapitalisation exercise.
