Nigerian stocks have opened the new year for the third consecutive time, generating strong returns.
For the third year in a row, the Nigerian stock market has started the year strong, as investors who may not have benefited from last year’s massive gains continue to take new positions. The All Share Index, a measure that tracks stock price movements 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, gas and banking sectors. This reached new heights, and with growth of 45.90% in 2023, NGX returns have outpaced inflation. In 2024, the NGX has picked up where it left off last year, driven primarily by bank stocks.
“Markets are generally stronger in January based on market data from the last four years,” said Christian Orajekwe, managing director of Cordros Capital, a Lagos-based financial services company. “This year will be a good year for stocks. Some people missed last year’s rally and are taking early positions.
Publicly available data from the NGX showed that for the past three years, the stock market has opened each new year on a high.
The trend started in 2020 with Bloomberg naming the Nigerian Stock Exchange (as it was called at the time) the most efficient stock market based on 93 global indices. Since then, the NGX has continued its upward trend.
The market is also expecting several positive full-year reports, share buybacks and new listings to drive better sector performance, three analysts told TechCabal.
Still, one analyst sounded a note of caution, predicting that investors would likely sell heavily to take profits in the second quarter.