Nigerian equities ride New Year wave as early bets on 2024 drive record highs

Nigerian equities have opened the new year a third consecutive time driving high returns.

For the third consecutive year, the Nigerian stock market started the year strong, as investors who may have missed out on last year’s massive gains continue to take new positions. The All Share Index, a metric that tracks the movement of share prices on an exchange, hit an all-time high of 78,020.54 this week.

The NGX performed beyond expectations in 2023, driven by the oil and gas and banking sectors. It reached new highs, and with 45.90% growth in 2023, the returns on the NGX beat inflation. In 2024, the NGX has picked up where it stopped last year, driven mostly by banking stocks.

“The markets are usually stronger in January based on the market data in the last four years,” said Christian Orajekwe, the managing director of Cordros Capital, a Lagos-based financial services firm. “This year will be a strong year for equities. Some people missed last year’s rally and are taking early positions.”

Publicly available data by the NGX showed that for three years, the stock market has opened each new year on a high.

The trend began in 2020 with Bloomberg naming the Nigerian Stock Exchange (as it was called at the time) the best-performing stock market from 93 global indexes. The NGX has continued on an upward trend since then.

The market is also anticipating several positive full-year reports, share buybacks and new listings to drive better performance of the sector, three analysts told TechCabal.

Yet, one analyst sounded a cautionary note, predicting investors would likely sell-off to take profits in Q2.