- Market cap crosses N50trn mark as investors pocket N1.01trn
The International Monetary Fund has ranked Nigeria among the countries in Africa with low debt compared to its GDP.
Nigeria with a debt-to-GDP ratio of 41.3 percent is ranked second on the list of least indebted countries on the continent despite cries about its bloated debt servicing.
According to the IMF, the country has about 41.3 percent debt to GDP, and its diverse economic sectors and efforts to manage its debts contribute to its position among the least indebted nations.
The latest report which said about 10 African countries still have manageable debts compared to their GDP, is coming at a time Nigerians are calling for the country to tame its appetite for borrowing.
Nigeria’s current debt profile recently hit N87 trillion, with the Federal Government saying it will convert the Central Bank of Nigeria’s Ways and Means Advances to loans.
Just recently, ex-president Olusegun Obasanjo raised the alarm that African countries face challenges in obtaining debt relief due to mismanagement of resources.
He stressed the need for careful leadership, warning against debt trap, and encouraging qualities such as setting examples and decision-making for effective leadership.
Debt-to-GDP is a critical metric that compares a country’s total debt to its economic output.
Lower ratios show financial stability and higher ratios indicate potential challenges in fulfilling debt obligations, which attract global investors, and interest rates on government bonds.
Other countries listed by the IMF are Cameroon. The Central African country’s debt-to-GDP of 39.6 percent demonstrates Cameroon’s commitment to keeping a fiscal discipline. The country has maintained strict control over government expenditures and prudent handling of oil revenue, critical resources, and others, which have aided its budgetary stability.
With a 38.7 percent debt-to-GDP ratio, Chad reflects a balanced approach to managing financial obligations with its 38.7% debt-to-GDP after emerging from years of internal war. The country’s debt restructuring initiatives and transparency have been critical in keeping its debt profile low. Comoros: 36.9% debt-to-GDP ratio the country shows prudent fiscal discipline with a debt-to-GDP ratio of 36.9%, an example of a nation’s debt management.
Nigeria’s debt hit a new record, surpassing an eightfold increase in the last 10 years. The substantial growth became evident considering the inclusion of the CBN loan recently authorised by President Bola Tinubu.
The President had earlier asked the Senate to approve his proposal to securitise the outstanding N7.3 trillion Ways and Means which the Senate obliged.
Market cap crosses N50trn mark as investors pocket N1.01trn
The bulls maintained a firm grip on the Nigerian equities market, closing higher by 1,833.72 points to push the market benchmark Index up by 2.04 percent to reach a new high of 91,896.97 points, breaching the psychological 91,000 mark.
Similarly, the market capitalization of listed equities experienced a parallel surge of 2.04 percent, crossing the significant N50 trillion thresholds.
Market analyst attributes the upswing to robust investor interest spanning various stocks within the Industrial, Oil & Gas, and Consumer Goods indexes.
The uptrend contributed to a substantial year-to-date return of 22.90 percent. Notably, equity investors amassed gains totaling N1.01 trillion during Thursday’s trading session.
However, despite the market’s overall positive trajectory, the distribution exhibited a less favourable trend, with 33 gainers in contrast to 42 laggards.
Industrial goods and oil & gas stocks notably attracted investor attention due to recent corporate disclosures related to trading and operating activities. CONOIL (10 percent), JOHNHOLT (10 percent), NEM (10 percent), ETERNA (10 percent), and UNITY BANK (10 percent) garnered heightened interest for potential upward pricing.
Conversely, IKEJAHOTEL (9.79 percent), ROYALEX (9.78 percent), MBENEFIT (9.57 percent), LINKASSURE (9.40 percent), and JAPAULGOLD (9.33 percent) emerged as the laggards for the day, experiencing adverse price movements.
In tandem with the surge in the All-Share Index and market capitalization to historic levels, positive trading activity was observed on the Nigerian Exchange Group.
Traded volume experienced a 12.16 percent decrease, amounting to 1.14 billion units. Meanwhile, the total traded value saw a substantial 17.78 percent increase, totaling N19.29 billion. Total deals increased by 1.91 percent, reaching 17,804 trades.
On the sectoral front, a mixed sentiment prevailed, with the banking and insurance indexes shedding 1.89 percent and 2.11 percent, respectively, due to sell-offs in entities such as JAIZBANK, UBA, FIDELITY, ROYALEX, MBENEFIT, and LINKASSURE. Conversely, the Consumer Goods, Oil & Gas, and Industrial Goods indexes emerged as advancing sectors, gaining 0.87 percent, 2.69 percent, and 7.83 percent, respectively.
This positive movement was attributed to gains in CONOIL, ETERNA, PZ, MAYBAKER, BUACEM, and DANGCEM. As the trading session concluded, TRANSCORP took the spotlight as the most traded security by both volume and value, with 156.62 million units traded in 1,846 trades and a total value of N2.96 billion.