Closing out 2023, the Nigerian Exchange Limited (NGX) equity markets celebrated a resounding triumph, propelled by a resurgence in investor confidence in listed companies.  

Standing out prominently among the sectors, the oil and gas index exhibited exceptional performance, recording an impressive surge of 125% over the year. 

This optimistic outlook can be attributed to a synergy of factors, foremost among them being a series of policy reforms initiated by the administration of President Bola Tinubu since his inauguration in May.  

A major shift was the discontinuation of the costly fuel subsidy program, a contentious initiative that had long been a drain on public coffers. This decision, seen as a crucial move towards fiscal prudence, reignited interest in energy stocks on the NGX. The consequent influx of capital not only significantly bolstered liquidity in the market but also spurred a more widespread upswing across various sectors.  

Market performance

Closing the year on a high note, the NGX Exchange recorded a year-on-year increase of 45.90%, marking the fourth consecutive annual gain as it closed at 74,773.77 index points. Concurrently, the market capitalization experienced a noteworthy uptick of N13 trillion year-on-year, concluding at N40.92 trillion. 

The positive market sentiment observed among investors can be attributed to various factors, with a key influence being the favourable policies implemented by President Bola Tinubu’s administration. These policies encompass the removal of fuel subsidies, the rationalization of exchange rates, and the floating of the naira. Investors strategically positioned themselves, capitalizing on the recent record earnings posted by quoted firms.  

Oil and gas index performance

As per data sourced from the Nigerian Exchange Limited and tracked by Nairametrics, the oil and gas index, reflecting the performance of quoted oil and gas firms on the NGX, surged by an impressive 125.5% or 580.58 basis points. It concluded the year at 1,043.06 index points, a significant ascent from the opening index of 462.48 at the commencement of January 2023. 

The constituents of the NGX oil and gas index include prominent oil marketing and production companies such as Conoil, Eterna, Japaul Gold and Venture, MRS Oil Nigeria, Oando, Seplat Energy, Total Nigeria, and Capital Oil. 

Following closely, the NGX banking index also recorded substantial gains, with an increase of 114.89% or 479.7 basis points. It wrapped up the trading year at 897.20 index points, a notable climb from the initial figure of 417.50 in January.  

Key drivers

The surge in this segment was driven by notable advancements in the share prices of Japaul Gold, MRS, Seplat Energy, Total Energy, Eterna, and Conoil. 

Delving deeper into the year-to-date performance of these companies as of December 29, 2023, reveals striking figures. Japaul Gold led the pack with the highest gain, boasting an impressive 507%. Following closely, MRS recorded a substantial increase of 645%. Other noteworthy performances include Conoil at 217%, Oando at 168%, Seplat at 110%, Eterna at 107%, and Total Energy at 99.48%.  

What market operators said about the market:  

Tajudeen Olayinka, CEO, of Wyoming Capital and Partners reviewing the market in an exclusive chat with Nairametrics noted that the market in 2023 has been quite eventful and bullish. 

• “We saw a market that picked its 2023 position way back in November 2022, when it was obvious that the three leading presidential candidates, namely: Asiwaju Bola Ahmed Tinubu, Peter Obi, and Alhaji Atiku Abubakar, that could succeed former President Muhammadu Buhari, were pro-market.  
• And so, the build-up to the bullish run in 2023 that started in November 2022 was a demonstration of market confidence in a private sector-centric president,” he said.  

He noted that President Bola Ahmed Tinubu’s inaugural speech, specifically addressing the removal of fuel subsidies and exchange rate unification, served as a catalyst, finally unlocking the long-suppressed market-wide confidence. This latent optimism, which had lingered but remained elusive in the market until then, was activated following the president’s address. 

Furthermore, he emphasized that this heightened market-wide confidence endured consistently throughout the entire year.  

Executive Vice Chairman, of Hicap Securities Limited, Mr. David Adonri Highcap said that as of 29 December 2023, equities had appreciated year-to-date by about 45%.  

He stated that the Oil/ Gas sector appreciated the most, gaining 125% while the Industrial Goods sector gained 12.85%. Year-to-date, making it the least gaining sector.  

• “The Equities secondary market broke several records including crossing the 15-year-old highest level of 66,371.20 attained on 5th March 2008. 
• Market Capitalization also crossed N15.54 trillion it attained on 5th March 2008. As of 29 December 2023, ASI closed at 74,773.85 while Market Cap was over N40.507 trillion for equities and N33.831 for Bonds,” he said.