Nigeria: How More Domestic Investors Returned to Equities in 2021

Nigeria: How More Domestic Investors Returned to Equities in 2021

As with most other years, 2021 brought fascinating developments in the financial market, especially as the path from the pandemic was far from certain.

The performance of the financial market generally fell in line with expectations as fiscal and monetary stimulus packages resulted in a ‘pull to norm’.

The equities market saw more domestic investors key into the market, as not less than N1.544 trillion worth of Nigeria’s listed stocks were exchanged by dealers on the Bourse, as against N1.581 trillion recorded in the same period in 2020.

Out of the total amount of equities traded in the review period, domestic investors exchanged equities worth N1.215 trillion, representing 78.66 per cent of the total. Domestic investors had the same in 2020 exchanged stocks worth N989.12 billion.

Defying expectations, Nigeria’s capital markets look good to end this year 2021 in positive territory with record positive return of +4.94 per cent as of December 24, despite the fears over Omicron variant taking heavy toll on stock investors’ risk appetites.

The NGX All Share Index (ASI), which opened the year in review at 40,270.72 points, had risen to 42,262.85 points as of December 24, 2021. Also, the equities market capitalisation that opened the review year at N21.063 trillion had risen to N22.060 trillion as of December 24, 2021. Bonds Market Capitalisation has risen from N17.501 trillion as of December 2020 to N19.596 trillion as of December 24, 2021.

Amid this, the stock market in 2021 has witnessed foreign investor’s exit, as value of NGX top 10 highly capitalised stocks dropping by N474.95billion in nine months

The blue chips companies on NGX have maintained stronger earnings and interim dividend pay out to investors but domestic and global economy challenges over COVID-19 virus existence created room for sentiment trading.

In the year under review, the stock market has witnessed foreign investors exit in a deal worth N173.32billion as at October 2021 as against N391.98billion in 2020. Foreign investors’ inflow as at October was N156.30billion while inflow in 2020 was at N200.59 billion

Stocks that fuelled market gain in 2021

Some of the stocks that exceeded 20 per cent return include: Honeywell Flourmills (+187.5%), Guinness (+105.3%), Champion Breweries (+183.7%), Custodian Investment (+33.3%), Ecobank Transnational (+48.3%), FBN Holdings (+60.8%), Julius Berger (+25.6%) and Livestock Feeds (+46.8%).Others are: AXA Mansard (+112.4%), Morison (+270.6%), NAHCO (+47.8%), Oando (+24.3%), Okomu Oil (+56%), Presco (+23.7%), PZ (+26.4%), Seplat Energy (+61.6%), TotalEnergies (+70.7%), UACN (+31%), United Capital (+110.2%), University Press (+129.7%), […]

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