- Nigerian equities rallied 5.2% following President Tinubu’s inauguration speech, termed a “TinuBULL” by analysts.
- All market indices posted positive gains, with the NGX30, NGX Banking, and NGX Industrial indices gaining 5.58%, 8.2%, and 6% respectively.
- Market turnover rose 10%, total volumes traded increased by 133.5%, and the market capitalization of the All Share Index surpassed N30 trillion.
Nigerian Equities rallied to a 5.2% gain on Tuesday as investors reacted positively to the inauguration speech of President Bola Ahmed Tinubu.
Analysis by Nairametrics shows that stocks rallied from the opening sessions, posting one of the best one-day returns ever. Stocks effectively gained N1.5 trillion in one day which is one of the highest one day gain in a long time.
More details on how the market performed
All the indices posted positive gains with NGX30, NGX Banking, and NGX Industrial all posting 5.58%, 8.2%, and 6%, respectively.
That total number of deals recorded was 9,916, up 56.38%, suggesting that investors were in a bullish mode. Total volumes traded were also up 133.5%, even as market turnover rose 10%.
The market capitalization of the All Share Index also crossed the N30 trillion mark to N30.35 trillion.
The All Share Index is now up 8.77% year to date. Out of the top 10 gainers, 8 of the stock gained 10% with Zenith Bank, FCMB, Transcorp Hotel, and NB among stocks that gained 10%.
The FUGAZ was also among the top traded stocks by Value with Access Bank leading with N2.4 billion in trade.
What market operators said
Reacting to the development, the Managing Director of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe, told Nairametrics that the market’s reaction was expected. He said:
“The least of policies that the president is taken into consideration were like sweet melodies to the ear of market operators. This is because issues such as high-interest rates, multiple exchange rates, slow GDP growth, and the inability to repatriate dividends of foreign investors are some of the issues that have held the economy and prevented the stock market from reaching its full potential.
“The president announcing his intention to tackle these issues was received very well by market operators which led the ASI to gain 5.2%, the largest one-day gain in the index for about two years.
“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.”
Also commenting on the development, the Executive Vice Chairman of Hicap Securities Limited, Mr David Adonri, said the smooth handover of government generated positive confidence in the market.
“Some of the policy statements regarding some new policies like the one on discontinuation of fuel subsidy, unification of exchange rate, stern measures against insecurities, and interest rate policy, among others, are measures that resonated well with investors and boosted the market sentiment,” Adonri said.
Optics
In 2015, when INEC announced Buhari as the winner of the national elections, stocks gained for 10 straight days from the 24th of March to the 8th of April 2015.
The exchange rate also strengthened at the time and stocks ended the month of March and April for 5.45% and 9.33% respectively.
However, it turned red in May, June, July and August eventually ending the year with a loss of 17.36%.
Based on the closing day rate for May 30th, 2023, stocks are currently up 6.38% and on track to be the best monthly gain since December 2023.
Recall that;
The new president has said in his inauguration speech that Nigeria’s monetary policy needed thorough housecleaning, adding that the CBN must work towards a unified exchange rate and reduction of interest rate.
Market operators reacted positively to this, saying Tinubu’s position on the need to review current monetary policy will be a welcome development that will quicken positive change in the economy.
Credit: Nairametrics
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