The Nigerian stock market saw a windfall on the year as the twenty largest companies on the Nigerian Exchange Limited added N2.47tn ($6.24bn) with the market outperforming inflation.
Data from the NGX available to our correspondent revealed that twenty companies listed on the exchange controlled 91.54 per cent of the total market capitalisation, as of 30 June 2021.
The total market capitalisation of the NGX rose by 52.35 per cent year on year as it ended June on N19.76tn, surpassing headline inflation of 17.75 per cent according to the latest data on the Consumer Price Index from the Nigerian Bureau of Statistics.
At the top of the list by percentage was Airtel Africa Plc which saw a 106.27 per cent increase in its stock price valued at N1.31tn, to close the half-year at N2.55tn. Airtel owned 12.89 per cent of the market as of June 30.
The other top 4 gainers were Lafarge Cement Plc which jumped 90.91 per cent closing at N338.26bn, Seplat Energies Plc rising 81.35 per cent to close at N411.91bn and Dangote Cement Plc with an 81.35 per cent increase, ended at N3.77tn. Dangote Cement occupied a market share of 19.06 per cent.
The Telecoms sector gained 72.50 per cent on average as MTN Nigeria Plc, the largest telco on the NGX ended June with a 38.72 per cent increase in its market capitalisation YoY valued at 926.13bn to N3.32tn. MTN controlled the second largest market share on the NGX after Dangote at 16.79 per cent.
Zenith Bank Plc, Nigeria’s largest bank by Profit After-Tax as of 2020 according to earnings releases available on the NGX, saw its market capitalisation rise by 46.91 per cent to N747.24bn, with a market share of 3.78 per cent. FBN Holdings Plc followed with a 39.42 per cent climb to N260.24bn closing on a 1.32 per cent market share.
The largest bank on the NGX by market share at 4.47 per cent was Guaranty Trust Holding Company Plc which saw its market cap rise to N882.94bn as trading ended on June 30. Other banking sector gainers on the list were Stanbic IBTC Holding Company Plc (+32.80%, 518.93bn), Access Bank(+27.27%, N2298.58bn) and United Bank for Africa Plc (+13.28%, N247.95).
Nigerian Breweries Plc led the charts in the Consumer Goods sector with a 71% leap closing on a market valuation of N478.61bn. Nestle recorded the largest market capitalisation in the sector and fifth largest overall with a 5.62 per cent market share and a 16.67 per cent rise to N1.12tn as trading closed for H1 2021.
BUA Cement Plc recorded high growth levels in its first year on the NGX as it sprung by 66.28 per cent YoY from N1.24tn in June 2020 to N2.55tn. The company announced its financial results for the year to the NGX and investing public, posting operating income margins of 46.2 per cent on a topline revenue of N209.4bn.
Net Foreign Portfolio Investment still negative
The NGX Domestic and Foreign Portfolio Investment Report showed that the NGX as of 31 May 2021, recorded an inflow of N91.32bn year to date while 107.22bn was withdrawn by the Investors during the same period.
Further analysis of the numbers revealed that the Net Foreign Portfolio Investment, the difference between total inflows and outflows, rose by 104.80 per cent YoY from -N234.66bn as of June 2020 to –N11.48bn on June 2021.
Senior Vice-President at FBN Holdings Uwa Osadiaye told our correspondent that Foreign Portfolio Investors have a basket of emerging and frontier markets as investment destination options.
He said “At the moment, many feel Nigeria is a bit volatile and are not quite satisfied with the forex situation, so they are sitting it out in regards to Nigeria and pitching their tents elsewhere.
“Also, investors from the United States can not be more thrilled by their local market which at the moment, is quite bullish,” Osadiaye added.
Ibrahim Shelleng, Managing Director Credent Investment Managers explained that part of the drop in FPI was a reaction to COVID-19. “Many of them were not sure what would happen, so there was a lot of capital flight as a result.”
“There’s a significant level of lack of confidence in government policy and also no clear direction on where the country is heading. Investors do their analysis and research, and if the policies and growth projections do not align with what they are looking for, obviously, they will search for alternatives like Ghana and Senegal.”
Shelleng added that there were portfolio investors who have been unable to exit due to fx scarcity making others wary of bringing money in.
The NGX disclosed in its report stating that foreign transactions in the NGX over 14 years increased by 18.45 per cent from N616bn in 2007 to N729bn as of 2020.
“As at 30 June 2021, total transactions at the nation’s bourse increased by 3.68 per cent from N97.19bn (about $236.33m) in May 2021 to N100.77bn (about $244.88m) in June 2021.
“The performance of the current month, when compared to the performance in June 2020 (N128.88bn), revealed that total transactions decreased by 21.81 per cent.