Capital Market Defies Headwinds To Record Growth In 2024

In a year marked by significant economic headwinds, Nigeria’s capital market has proven its resilience and capacity to drive the nation’s economic ambitions forward. As Africa’s largest economy marches towards the audacious goal of a $1 trillion economy by 2030, the Nigerian Exchange Limited (NGX) closed 2024 with an impressive market capitalisation of ₦61.944 trillion, a testament to the robust interplay of new listings, bank recapitalisations, and surging domestic investor participation.

Despite a slight dip of 0.05 percent in trading activity on December 27, 2024, attributed to profit-taking by investors, the NGX showcased its strength by concluding the year with the All Share Index at a historic 102,186.03 points. From the year’s opening market capitalisation of ₦40.918 trillion, the exchange added an extraordinary ₦18.2 trillion, solidifying its place among Africa’s top four best-performing exchanges.

Transformative Listings and Strategic Recapitalisation

The year saw the successful listing of ₦8.1 trillion worth of shares, a critical driver of the market’s growth. Among the notable entrants was Aradel Holdings Plc, which made a ground breaking debut with a ₦3.05 trillion listing. Transcorp Power Plc followed suit with ₦1.8 trillion worth of shares, further bolstering the market’s vibrancy.

The banking sector, spurred by the Central Bank of Nigeria’s (CBN) revised minimum capital requirements, was a focal point of activity. With new thresholds mandating ₦500 billion for international banks and ₦200 billion for national authorisations, financial institutions turned to the capital market to secure the necessary funding. This drive led to public offers, rights issues, and private placements that collectively injected ₦1.92 trillion into the economy.

Key players such as Guaranty Trust Holding Company Plc (GTCO), Zenith Bank, and Access Holdings spearheaded these efforts, raising ₦400.5 billion, ₦289.38 billion, and ₦351.01 billion respectively. Their contributions highlighted the critical role of recapitalisation in not just regulatory compliance but also fostering innovation and economic stability.

A Boon for Breweries and Domestic Investors

The breweries sector also played a significant role in capital-raising activities. Nigerian Breweries Plc and International Breweries Plc collectively raised over ₦1.18 trillion, with rights issues heavily oversubscribed. These funds were key in strengthening their operations and offsetting liabilities, demonstrating the capital market’s capacity to address diverse industrial needs.

On the trading floor, domestic investors dominated the scene, accounting for a staggering 82.44 percent of the ₦3.968 trillion in equities traded by September 30, 2024. Their participation signified a growing confidence in the local market, complemented by the NGX’s innovative measures, such as the NGX Invest platform. This digital tool alone facilitated over ₦1.26 trillion in capital-raising efforts, enhancing market efficiency and transparency.

As Nigeria positions itself for greater global competitiveness, the Nigerian Exchange Group (NGX Group Plc) remains a linchpin in this transformation. Chairman of NGX Group Plc, Dr.  Umaru Kwairanga, reaffirmed the group’s commitment to building a resilient capital market ecosystem that bridges the gap between issuers and investors. He emphasised that the NGX’s innovations are not merely about compliance but about driving economic growth and fostering investor confidence.

With 2024 concluding on a high note, the capital market’s performance serves as a reminder of its crucial role in shaping Nigeria’s economic narrative. As the nation inches closer to its $1 trillion economy target, the foundations laid this year will undoubtedly serve as a launch pad for greater achievements in the years ahead.