Nigerian stocks posted their best outing in nearly two decades this year as the main equity index showed a yield of 51.2 per cent at market close in Lagos on Wednesday. Never since 2007, when equities returned 74.7 per cent, had the benchmark index performed that high.
The inflation-beating performance stands 36.8 per cent higher than consumer inflation for November, which was 14.5 per cent.
The market capitalisation of the 151 quoted stocks on the Nigerian Exchange (NGX) was valued at N99.4 trillion at the end of trade. That compares to N62.8 trillion a year earlier.
The all-share index closed at 155,613.03 points, up from 102,926 at the beginning of the year.
Positives
Monetary authorities’ shift from a contractionary policy stance in February, following years of hiking rates to temper inflation, helped launch stocks, which as of then had gained less than 5 per cent year to date, on the path of relatively rapid gain.
Hordes of economic reforms targeting growth and a largely stable exchange rate that followed months of volatility and turbulence were critical in healing bruised investor sentiment and restoring confidence to the Nigerian equity market.
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On that score, foreign portfolio participation in equity trading in the eleven months to November accelerated to N2.2 trillion or 20.8 per cent of total trade from N785 billion in 2024. That was the peak level ever achieved since 2007.
One of the big moments was the hysterical buy interest in insurance stocks that a presidential assent to a new law overhauling the industry spurred in the first week of August.
Investors swiftly warmed up to the potential positive transformation, which reforms like recapitalisation, compulsory insurance for property as well as digitisation and creation of dedicated policyholder protection funds, would bring to underwriting business.
The Insurance Act mandates insurers to increase capital by 500 per cent within a year.
The Insurance Index reported a 41 per cent appreciation in the week following the approval of the law, the biggest weekly gain by the sector since official record began.
Early in December, the market transitioned from a T+2 (today plus two days) settlement cycle to a T+1 cycle, marking a change to a shorter period between the time a transaction is executed in the market and when settlement is made, aligning with global best practices.
Downsides
Perhaps, the single biggest upheaval the market witnessed in the year was the far-reaching implications of the decision of the Nigerian Government to scale up the capital gain tax on shares sold by investors as part of broader fiscal reforms aimed at bucking up revenue.
On 12 November, jitters from the planned implementation of a new rule, which raised the tax to 30 per cent from 10 per cent, prompted international investors to offload their shares before the law would come into force in January 2026.
Stocks tanked by 5 per cent on the move, marking the bourse biggest daily gain in well over 15 years. The government later revealed plans to review the law, helping calm nerves and preventing further volatility.
Performance by sector
NGX CONSUMER GOODS
129.6
The NGX Consumer Goods, the index tracking the most capitalised and liquid stocks in the consumer goods industry, yielded 129.6 per cent, which compares to 54.4 per cent a year ago.
NGX INSURANCE INDEX
The NGX Insurance Index, which tracks top insurance stocks in terms of market value and liquidity, returned 65.5 per cent, compared to 112.7 per cent in 2024.
NGX INDUSTRIAL GOODS
The NGX Industrial Goods, the sector gauge that tracks the most capitalised and liquid stocks in that sector, yielded 58.9 per cent.
NGX BANKING
The NGX Banking, the sector index tracking the top bank stocks based on market capitalisation and liquidity, returned 39.8 per cent, compared to 21.3 per cent last year.
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NGX OIL & GAS
The NGX Oil and Gas was the worst-performing sector index and the only one that posted a negative yield. The gauge returned -1.5 per cent in contrast to the 158.9 per cent it reported in 2024, when it was the best-performing sector index.
NGX 30
The NGX 30 tracks the performance of the 30 most capitalised and liquid stocks on the NGX. It yielded 48.8 per cent, up from 36.6 per cent a year earier.
TOP PERFORMING STOCKS
EQUITY GAIN
1. NCR Nigeria 1,354 per cent
2. Aso Savings & Loans 542 per cent
3. Eunisell 497 per cent
4. Beta Glass 470 per cent
5. The Initiates 432 per cent
