Nigerian Exchange Limited Suffers N3.6 Trillion Loss According to Statistics

In April 2024, statistics revealed that investors in the Nigerian Exchange Limited (NGX) stock market segment suffered losses of over N3.6 trillion due to the CBN's attractive yields on Nigerian Treasury Bills (NTBs).

However, due to high inflation, the Nigerian Treasury Bill's yield has risen since the CBN began increasing its interest rates. In March 2024, the apex bank raised its benchmark monetary policy rate to 24.75% when the inflation rate was 33.20%.

According to a report by THISDAY NEWSPAPER, the total market capitalisation finished April 2024 with N55.55 trillion to lose over N3.6 trillion or 6.03%, from how it began the month with N59.120 trillion in the combined market capitalisation. 

As a result, the NGX All-Share Index ended trading in April 2024 at 98,225.63 basis points, a decrease of 6.06 percent or 6,336 basis points, from its closing trading level of 104,562.06 basis points in March 2024.

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The NGX Banking Index closed April 2024 at 774 basis points, dropping 25.5% from the 1,029.63 basis points it opened for trading. The NGX Industrial Index closed March 2024 at 4,841.20 basis points, a decline of 15.4 percent to close April 2024 at 4,686.98 basis points.

Speaking about the NGX Banking Index performance, the Managing Director of HighCap Securities Limited, David Adonri, said, "After the announcement by CBN directing banks to recapitalise, the market started declining, but we cannot say for sure that that policy is behind the decline in the prices of banks' stock since that announcement was made.

"I think the major factor should be the second announcement that restrained banks from paying out good dividends in line with their extraordinary income within the financial year."

He said that the Nigerian stock market was improving and that this correction would likely continue as the focus shifted to the debt and primary markets.

He explained that "these are also part of the policy objectives of the monetary authority to stop the overheating of the equities market so that it does not develop into a bubble that would destroy the economy."

Other analysis showed that the NGX Oil/Gas Index closed April 2024 at 1,267.98 basis points, a decline of 2,64% from the 1,294.38 basis points it closed March 2024, and the NGX Consumer Goods Index fell to 1,546 basis points as of April 2024, representing 6.5% from the 1,610.80 basis points it closed in March 2024.

Investors' returns increased by 31.36% from 74,773.77 basis points when the market opened for trading basis points to 98,225.63 basis points as of April 30, 2024, considering the stock market's performance in the first four months of 2024.           

With all these, the Nigerian stock market has continued to be one of the best-performing in Africa, with an investor return of 31.36 percent despite experiencing double-digit inflation and insecurity, among other factors.

The market capitalization closed at N55.55 trillion on April 30, 2024, up N14.64 trillion from the N40.918 trillion at which the stock market opened for trading this year.