Despite expectations that the 2023 general election will further erode confidence in the Nigerian stock market, markets opened the week on a positive note yesterday, extending last week’s gains as the benchmark closed by 0.69% to settle at 55,328.42 points.
Some experts have said that the stock market has defied the 2022 election swings thanks to expected full-year dividend payments and hope that the results will not lead the country into an unimaginable crisis.
On Market Performance; Trading in the market heavyweights like BUA foods which rose at +4,65% as well as top bank Zenith Bank at +0.78%, GTCO at +1.96% and Stanbic IBTC at +10.00% kept the stock market in the green zone. Consequently, year-to-date (YTD) returns rose to 7.96%, while market capitalization increased by N207 billion to N30.1 billion. Further analysis of the day market trading showed that the trading volume decreased compared to the previous session when the value of transactions decreased by 38.84%. A total of 149.78 million shares were exchanged with a value of 1.54 billion were exchanged in 3,186 transactions. Oando led the number of transactions with 62.6 million units traded, up +10.00%, while Zenith Bank was up 0.78% with transactions valued at N205.55 million.
What do the experts are saying; Chairman of New Dimension Shareholders Association Patrick Ajudua said the political momentum has not turned into chaos robbing the market of confidence. He added that portfolio investors are positioning themselves for dividend payments, which some listed companies have already started declaring. This explains why the market remained in the twilight of the election.
Reacting to the development, David Adonri, Vice President of Hicap Securities Limited also said that the current political uncertainty is determining the stock market as investors look forward to a bright performing environment. He added that the activities of political gladiators seem to favour the market in the short term, and due to the lack of cash, some investors direct their money to other financial instruments, such as shares.
In another expert report, CEO of Arthur Steven Asset Management Ltd, Olatunde Amolegbe said NGX has seen demographic changes in recent years. He noted that the COVID-19 pandemic and exchange rates have pushed international investors out of the market and local investors who don’t have to worry about the exchange rate and are likely to be more optimistic about their country.