Equities investors in the Nigerian Stock Exchange reaped N26.3 trillion as the nation’s pension fund assets rose by N2.9 trillion within the last one year of President Bola Ahmed Tinubu (BAT), LEADERSHIP can exclusively reveal.
Recall that Bola Ahmed Tinubu was sworn in as the president of the Federal Republic of Nigeria on May 29, 2023 and marks his one year in office on Wednesday, May 29, 2024.
Since the coming in of Tinubu’s administration, the equities market has witnessed an unprecedented rally and buying interest across sectors, especially in the financial services, consumer and industrial goods sub sector which has continued to trigger massive bargain hunting in large company shares, pushing the key performance indices and stimulating activities in the market, a development that has rated the nation’s stock market as best performing in Africa and third in the world.
Also, Tinubu’s peaceful transition of power and the administration’s pro-market policy statements has continued to spur an unprecedented rally in the stock market.
The market capitalisation gained N26.373 trillion from N28.845 trillion at which it opened trading on May 30, 2023 to close at N55.218 trillion as at May 24, 2024.
Similarly, the Nigerian Exchange (NGX) Limited All-Share Index (ASI) rose by 84.27 per cent from 52,973.88 points on May 26, 2023 to 97,612.51 points on May 24, 2024.
President Tinubu’s administration seeks robust economic reforms aimed at delivering a $1.0 trillion economy with 50.0m new jobs in eight years. Initiatives such as; removal of fuel subsidies, streamlined tax collection, agency mergers, optimising dead capitals, blockchain for land registration, and port decongestion tops priority list.
Speaking on market performance under the first year of Tinubu in office, the vice president, Highcap Securities Limited, David Adnori stated that “the Capital Market is a medium for raising of Long-term capital by government and businesses, and also for investment of savings. In the first year of President Tinubu’s administration, debt capital raising by the government through the Capital Market enjoyed a sustained tempo but there was almost no capital raising either through debt or equities by businesses.
“In the past year of the President’s administration, progress in the Market has been defined by a surging bull rally in the secondary market for equities. When this administration took office on 29th May 2023, All Share Index (ASI) of NGX, the metric for gauging performance of equities, was 52,822.93.
Thereafter, it proceeded on a galloping race which took it to 102,401.88 on 26th January 2024, thereby shattering previous records of growth. Following it’s overheating, the Equities Market is gradually experiencing correction bringing ASI down to 97,977.79 on 23 May 2024.”
He noted that the two major economic reforms of floating the naira and removal of fuel subsidy embarked upon by President Tinubu resonated well with the capital market. Adnori explained that, “these boosted investors’ confidence and increased demand for equities. The debt market increased in vibrancy too due to hiking of interest rate by the Monetary Authority to rein in inflation.
“As a result of these public macroeconomic policies under this administration, the Capital Market has been akin to a candle burning from both ends. Consequently, for investors, the Nigerian Capital Market has been an extremely profitable, liquid and safe investment outlet in the past one year. However, it did not deliver to the expectation of corporate Issuers.”
He added that, “if fundamentals of the economy and the Capital Market becomes stronger, investors’ confidence will remain high. Resolution of the crisis around trapped investor’s funds is a vital ingredient to bringing back many disillusioned foreign investors to the market.
“The economy across the board currently suffers from under capitalization. It is the duty of the Capital Market to mobilise the capital required to re-capitalize the entire economy. This is possible if investors’ confidence is high and macroeconomic policies are enabled.
“The only viable option left now is to run a supply side policy that can mobilise all the latent domestic factors of production to speedily close the supply gap that underpin the economic woes of Nigeria. Monetary policy tools have outlived their usefulness.”
The chief executive officer of Crane Securities Limited, Mike Ezeh said, the emergence of President Bola Tinubu further energised the market since market participants have hope in his ability to rejig the economy and implement economy friendly policies.
“The elections came and was hitch free against all unification of the multiple exchange rates, review of monetary and fiscal policies, shake up of major changes carried out at the apex bank and its overflow down to the deposit money banks across the country brought stability to the market.
“The commissioning of the first indigenous private refinery which has cyclical effect on both upstream and downstream operations of petroleum companies quoted in the market propelled the interplay in the market by some high-net-worth investors on many quoted companies resulting in high turnover in trading volumes of those companies leading to the significant increase in market capitalisation within the period,” he said.
Meanwhile, the nation’s pension assets rose from N16.7 trillion in June 2023 to N19.66 trillion in March 2024, which is the latest report released by the National Pension Commission(PenCom). This translates to a difference of N2.9 trillion growth within this period, a figure that could ride further when the reports for April and May 2024 are out.
Investment income, according to LEADERSHIP investigation, was instrumental to the continuous growth in pension funds, despite the fact that governments at majorly, State level are not paying the monthly pension contributions of their workers as and when due.
Similarly, the huge increase, according to findings, was attributed to new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.
Meanwhile, the insurance industry’s gross premium income rose to N1 trillion under his administration, despite the harsh operating environment and apathy of Nigerians about insurance services.
