Nigerian equities experienced a significant surge on Tuesday, with the main equity index rising by 5.2 per cent and shares gaining over N1.5 trillion in value.
The market’s strong performance was attributed to positive investor sentiments in response to the new policy directions outlined by President Bola Tinubu’s administration.
Investors responded favorably to President Tinubu’s planned economic reforms, particularly his commitment to eliminating costly fuel subsidies and unifying Nigeria’s multiple exchange rates.
This resulted in a notable increase in transaction volume, which rose by 133 per cent, and a doubling of market turnover.
The NGX 30 index, which tracks the top 30 companies on the Nigerian Exchange in terms of liquidity and market capitalization, recorded a robust growth rate of 5.6 per cent, marking the sharpest increase since November 2020.
In an unusual occurrence, several stocks registered gains of up to 10 per cent, the highest daily upper price movement allowed by the exchange.
Market analysts anticipate continued interest from investors seeking to reinvest dividends received in fundamentally sound stocks, while some risk-averse investors may take the opportunity to book profits on profitable positions.
Reacting to the development, the Managing Director of Arthur Steven Asset Management Limited, Olatunde Amolegbe, said issues such as high-interest rates, multiple exchange rates, slow GDP growth, and the inability to repatriate dividends of foreign investors has stiffed the growth of the economy, preventing the stock market from reaching its full potential.
“My expectation is for the momentum to continue in the few days as investors continue to digest the implication of these government policies.
“Despite the short-term pains that might come with this policy prescription, the expectation is that medium to long term, the economy will be much better, which is the reason why we are seeing this positive change today,” Amolegbe said.
Market breadth, which reflects investor sentiment, was positive, with 64 gainers compared to 14 decliners.
The all-share index experienced a significant boost, climbing by 2,771.9 basis points to reach 55,738.4, while the market capitalization reached N30.3 trillion. Year to date, the index has yielded an impressive 8.8 per cent increase.
TheNewsGuru.com (TNG) reports that the positive performance of Nigerian stocks demonstrates the market’s confidence and optimism in response to President Tinubu’s economic agenda.
Investors anticipate further opportunities for investment and growth as the new administration’s policies unfold, aiming to drive sustainable economic development and stability in the country.