Banks’ stocks drive NGX to 2nd best performing stock market in 2024

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Positive performance of banking stocks listed on the Nigerian Exchange Limited in the first two weeks contributed immensely to the growth of the local bourse benchmark index.
The benchmark index of the Nigerian Exchange Limited NGX All-Share Index recorded 11 percent growth at the close of trading last Friday, translating to 8,269 basis points year-to-date gain.

The record growth has placed the NGX second best performing Exchange in the world behind Argentina.

The development comes as Nigerian equities surpassed their European, Middle Eastern, and African counterparts in 2024, driven by pension funds and institutional investors anticipating record profits from lenders booking revaluation gains.

Analysis of the global equity market report conducted by Bloomberg shows that when compared with a less than 2 percent gain for the MSCI Emerging Markets Index over the same period, the NGX rose almost 60 percent in the past year.

The report identified Banking stocks as the major drivers of the gains recorded during the period, with the banking index up by 16 percent this year and 138.09 percent over the past 12 months.

“So far in 2024, Access Holdings Plc is up 21 percent, while Zenith Bank Plc is up 11.3 percent, and Guaranty Trust Holding Company is up by 14.3 percent,” the report stated.

It added that negative real yields on the nation’s fixed-income securities have also made equities relatively more attractive in the country.

Within the first two weeks of the year, bank stocks have sustained gains, with major tier-1 banks crossing the N1 trillion market capitalization marks.

Last week, the United Bank for Africa Plc became the first to cross the N1 trillion market capitalisation marks when its market value hit N1.02 trillion on Monday.

It was followed by Access Holding Plc and FBN Holding Plc, whose market capitalization rose to N1.06 trillion and N1.03 trillion respectively on Tuesday.

The duo of Zenith Bank Plc and Guaranty Trust Holding Company Plc last year exceeded the N1 trillion market capitalizations when they won investors’ confidences following the stock market rally sparked by the removal of petrol subsidy and the reform of the foreign exchange market in May and June respectively.