The Nigerian Exchange (NGX) started the second half of 2024 on a bearish note, as the market has declined by 0.39% over the past two weeks, leading to a N334 billion in its market cap.
At the close of the week ending July 12, 2024, the NGX closed with an All-Share Index of 99,671.28, down from the opening index of 100,057.49 at the start of July.
The decline has led to a N333.5 billion decline in the NGX’s market cap, moving from N56.602 trillion at the start of 2024’s second half to N56.268 trillion at the close of trading on July 12.
The market ended H1 2024 with a performance of 33.81%, as its ASI closed at 100,057.49. However, taking into consideration its current ASI, the market has produced a year-to-date return of 33.3%, slightly underperforming inflation in the country.
Performance highlights
So far, the best performing stock in the second half of 2024 is Veritas Kapital Assurance, which has appreciated by 33.3% over the past two weeks.
The stock has a year-to-date return of 224.3%, making it the second-best performing stock in the NGX this year.
- Veritas Kapital Assurance is presently trading with a share price of N1.20, a slight decline from its all-time high of N1.26 achieved on July 8.
- Following Veritas Kapital Assurance is Conoil Plc, which has gained 30.4% so far in July, with its share price closing at a year-high N137. This year, Conoil has delivered a year-to-date return of 63.2%, bolstered by reports of a remarkable 99.9% profit growth in 2023.
- Livestock Feeds is another stock with exceptional gains recorded in H2 2024, with a 25% appreciation so far. In the week ending July 12, 2024, the stock gained 18.9%.
- Coronation Insurance achieved a 17.9% appreciation in the week ending July 5, which contributed a 19.4% growth recorded so far in the month of July.
- AIICO Insurance has achieved a 17.9% gain so far in July, with a year-to-date return of 40% achieved in 2024.
- Linkage Assurance has also achieved a 17.9% gain in July, as well as a year-to-date return of 40%.
- United Capital has achieved a month-to-date return of 17% in July, as well as a year-to-date return of 22.6%.
- Associated Bus Company Plc (ABC Transport) closed the week ending July 12 as the best performing stock in the NGX, with a 20.3% return. However, in July, the stock has achieved a month-to-date return of 16.7%.
- Red Star Express Plc is the tenth best performing stock in the NGX so far in July. The stock has achieved a month-to-date return of 15.1%.
Commentary
The bearish performance of the NGX is a stark contrast from the trend observed in the second half of 2023. In 2023, the NGX recorded a 19% growth in the first half, however, the market recorded faster growth in the second half, gaining about 22.6% during the period.
At the time, growth in the market was linked to certain economic reforms which propelled investors to display confidence in the Nigerian equities market. The bullish ride continued into the first quarter of 2024, as the NGX’s All-Share Index appreciated to a new all-time high of 105,722.78 points on February 18.
In Q2 2024, the NGX depreciated by 4.3%, occasioned by banking stocks losing almost a fifth of their value. As the market moves deeper into the second half of the year, capital-raising efforts by both banks and non-banks in the market are likely to have dilutive effects on the existing shares in the market.
It remains to be seen whether the bearish trend in the NGX will persist, potentially leading to a market performance below last year’s 45.8% appreciation.