Through to 6th December, 2024, the Nigerian Exchange Group attained 31.34% Year-to-date, a figure good enough to place it fourth-best among African exchanges. That, coming against the backdrops of 33.88% October 2024 Inflation.
The Ghana Stock Exchange Composite Index leads the charge with a 51.38% YtD growth, followed by Malawi Stock Exchange at 48.86%.
Other exchanges are the Lusaka Securities Exchange with a 46.16% increase, while the Zimbabwe Stock Exchange is -99.89% down because of economic challenges.
The Nigerian Exchange Group has recorded foreign investments inflow as its transactions have reached N744.34 billion in the first ten months of 2024, which is 156% Year-on-Year compared to the previous year.
The Central Bank of Nigeria has introduced reforms to enhance market stability including the monetary policy rate that rose to 27.50% by December 2024 from 18.75% recorded in November 2023.
The total market capitalization of the Nigerian stock market has risen to around N59.107 trillion through listings such as Transcorp Power Plc and Aradel Holdings, valued at N2.7 trillion and N2.25 trillion.
What is the Nigerian Exchange Group?
The Nigerian Exchange Group is an integrated market infrastructure in Africa established back in 1961 and headquartered in Lagos, Nigeria. It evolved from the Nigerian Stock Exchange, which was originally founded as the Lagos Stock Exchange.
The demutualization of NGX Group took place in 2021, transforming it into a publicly traded company, with three main subsidiaries including Nigerian Exchange Limited (NGX), NGX Regulation Limited (NGX RegCo) and NGX Real Estate Limited (NGX RelCo).
Nigerian Exchange Limited is an operating exchange. The various securities are traded through the platform. Currently, as of September 2024, there are 393 listed on NGX, comprising:
- 151 listed companies across different boards (Premium, Main, Growth, and ASeM)
- 157 fixed income securities
- 12 exchange-traded products
- 4 index futures
The group also provides auxiliary services such as market data solutions and real estate services through subsidiaries. In addition, NGX Group has interest in the financial infrastructure segment through its investments in clearing systems and fintechs.
The company’s mission includes reliable access to capital by businesses and investors as well as a promotion of secured savings systems.
The exchange runs an Automated Trading System since 1999. A next-generation trading platform called X-Gen that can enhance electronic trading capabilities was also launched by it in 2013. From Monday to Friday from 9:30 A.M. to 2:30 P.M. trading occurs
NGX Group, among other bodies, receives strict regulation from the Nigerian Securities and Exchange Commission, so proper compliance of financial operations and regulations can be conducted over its operations.
The group has also created an Investors’ Protection Fund to protect investors from losses as a result of risks arising from various trading activities.
The NGX Group is headed by Temi Popoola, who acts as the Group Managing Director/CEO. The subsidiaries have their individual leadership, with Jude Chiemeka being in charge of NGX while Olufemi Shobanjo leads NGX Regulation.
How Many Banks are Listed on the Nigerian Exchange Group?
- Access Bank Plc
- Ecobank Nigeria Plc
- Fidelity Bank Plc
- First Bank of Nigeria Limited
- First City Monument Bank Limited
- Guaranty Trust Holding Company Plc
- Jaiz Bank Plc
- Stanbic IBTC Bank Plc
- Sterling Bank Plc
- Union Bank of Nigeria Plc
- United Bank for Africa Plc
- Unity Bank Plc
- Wema Bank Plc
- Zenith Bank Plc
What is the Return of Nigeria Stock Exchange?
The Nigerian Stock Exchange has had growth in 2024, with a Year-to-Date return of 31.34% as of December 6, 2024. This makes it one of the four best-performing stock exchanges in Africa.
The best performer is the Ghana Stock Exchange Composite Index at 51.38%. The Malawi Stock Exchange is the second-best at 48.86%. Other performers include the Lusaka Securities Exchange with a return of 46.16%.
Analysts attribute strong performance of the Nigerian market to factors including increased participation by foreign investors, recapitalization policy of the Central Bank of Nigeria for the banking sector, and corporate earnings of major banks.
The market capitalization also registered growth, this time about N59.107 trillion in this period.
How do I Invest in Nigerian Stock Exchange?
1. Choose a Stockbroker
The first step involves selecting a registered stockbroker. A stockbroker will act as an intermediary for you and the market and execute buy and sell orders on your behalf. For a broker, you might want to consider the following criteria:
- Regulation and Licensing: They should be licensed by the Nigerian Securities and Exchange Commission (SEC).
- Reputation: Look for brokers with a solid track record.
- Fees: Compare transaction fees and account minimums.
You can find a list of licensed stockbrokers on platforms like the Nigerian Exchange Limited website.
2. Register with Your Stockbroker
After choosing a broker, you must register with them. This usually entails:
- Filling out a registration form (online or manually).
- Providing Know Your Customer (KYC) documents, which include:
- A valid means of identification (e.g., National ID, International Passport).
- Proof of residential address (e.g., utility bill).
- A passport photograph.
For non-Nigerians, notarized identification may be required.
3. Open an Account with CSCS
To trade on the NSE, you must also register with the Central Securities Clearing System, which manages the clearing and settlement of transactions. Your stockbroker will assist you in this process.
4. Fund Your Account
Upon having the account setup, you are required to put funds. The bank details your broker would provide you in which the payment will be processed for the funding of the account once the payment confirmation happens, and you could now begin trading.
5. Start Trading
Trade may either be instructed through direct broker or through some of the brokers’ online platforms; often the online platforms make for real-time trading along with real time management of portfolio.
Origins of the Nigerian Exchange Group
The Nigerian Stock Exchange, now called the Nigerian Exchange Group was founded on September 15, 1960 originally as the Lagos Stock Exchange. This was the first stock exchange in West Africa.
The formal operations started on August 25, 1961 with 19 securities listed for trading, although informal trading started earlier in June of that year.
Initially, the operations were carried out inside the Central Bank building in Lagos by four market dealers: Inlaks, John Holt, C.T. Bowring and ICON (Investment Company of Nigeria). It was in December 1977 that it was renamed the Nigerian Stock Exchange.
In 2021, the NSE became a demutualized body, rebranding the entity as the Nigerian Exchange Group. This restructuring will transform the organization from its status as a member-owned entity to a company that is limited by shares.
Post-demutualization, NGX operates with three subsidiaries:
- Nigerian Exchange Limited (NGX): The main operating exchange.
- NGX Regulation (NGX RegCo): An independent regulatory body.
- NGX Real Estate (NGX RelCo): Focused on real estate investment.
In 2021, the Nigerian Stock Exchange demutualized and became the Nigerian Exchange Group. This enabled it to become a public company limited by shares.
Since inception, NGX has grown in the listed securities category. Currently, it possesses more than 393 equities, bonds, and exchange traded funds.
Programs developed by the platform include developing a USSD platform offering real-time access to information on the exchange as well as the NGX Invest web application, which streamlined processes, especially for investors in capital-raising activities.
In 2024, NGX unveiled an Impact Board tailor-made for instruments that will foster sustainability. This move is meant to attract investments in projects toward sustainable development goals.
Reforms recently made were towards making Nigeria’s foreign exchange rate uniform. This will aim at a more transparent system that is more market-oriented. It is hoped to attract more foreign investment as uncertainties linked to multiple exchange rates were a disincentive to investors.
The establishment of NGX Regulation as an independent regulatory body has strengthened oversight and compliance within the capital market.
The introduction of a second-tier securities market in 1985 catered specifically to small and medium enterprises, allowing them to access public capital markets without meeting the requirements of the main exchange.
Subsidiaries of the Nigerian Exchange Group
1. Nigerian Exchange Limited (NGX)
This is the group’s core operating exchange, offering a marketplace for listing and trading diverse securities such as equities, fixed income products, and exchange-traded funds.
NGX offers capital-raising solutions to companies, besides providing market data solutions, indices, and ancillary technology services to enhance trading effectiveness. The Chief Executive Officer is Jude Chiemeka.
2. NGX Regulation Limited (NGX RegCo)
This subsidiary is the independent regulatory body for the Nigerian capital market. NGX RegCo has the mandate to enforce compliance with market regulations, ensure fair trading practices, and that all listed entities observe just and equitable principles. The Chief Executive Officer is Olufemi Shobanjo.
3. NGX Real Estate Limited (NGX RelCo)
This subsidiary is focused on real estate investment and management, this subsidiary engages in property letting and facility management services.
NGX RelCo is focused on providing bespoke real estate solutions in property development and investment that meet client needs. The Acting Chief Executive Officer is Gabriel Igbeka.
Operations of the Nigerian Exchange Group
The platform of NGX allows listing and trading a broad spectrum of securities. As of September 2024, it has listed 393 securities including 151 companies spread across different boards, 157 fixed income securities, and various exchange traded products.
Since April 1999, NGX has made use of an Automated Trading System. In 2013, it introduced the X-Gen platform to make electronic trading better for retail and institutional investors.
The exchange provides market data solutions that ensure trading decisions become informed and the market operates with transparency.
NGX operates under the Nigerian Securities and Exchange Commission. The regulatory is in charge of ensuring strict compliance with market standards with an emphasis on fair trading principles.
Trading on NGX are between 9:30 AM and 2:30 PM from Monday to Friday. The market prices together with the indices are published within a day through print and web media.
Leadership Structure
- Group Managing Director/CEO: Temi Popoola
- CEO of NGX: Jude Chiemeka
- CEO of NGX RegCo: Olufemi Shobanjo
- Acting CEO of NGX RelCo: Gabriel Igbeka
Equities Market
The equities market is a business entity operated by the Nigerian Exchange Group, where shares of publicly listed companies are sold and bought.
Currently, there are 393 listed securities, comprising 151 companies listed on different boards: Premium, Main, Growth, among others exchange-traded products as at September 2024.
The NGX has recorded growth, leading the rest of African stock markets with a rise in market capitalization at 35.17% in H1 2024 compared to Q4 2023.
Total market capitalization rose to an approximate N56.602 trillion during this period because of new listings and increases in share prices.
Fixed Income Market
The fixed income market in Nigeria covers products such as government bonds, state bonds, corporate bonds and green bonds. There were 157 fixed income securities as at September 2024 available on NGX.
Derivatives Market
Derivatives market in NGX has offerings like futures contracts. Those contracts help investors to mitigate risks against price movement by the underlying assets. Presently, four index futures contracts are available for trading.
The derivatives market in Nigeria is yet to be fully developed but opens avenues for investment to manage the risks associated with price volatility in the equities and commodities markets.
Trading Platforms and Technology in Nigeria Exchange Group
Adoption of Modern Trading Systems
The Nigerian Exchange Group has been running an ATS since 1999, which enables dealers to trade through a computer network.
NGX launched the next-generation trading platform, X-Gen, in 2013. It supports electronic trading for both retail and institutional investors.
NGX announced the development of e-offering platforms for facilitating capital raising through digital means.
Digital and Mobile Trading Innovations
Several mobile trading platforms are available in Nigeria. These enable the trader to access the market using the smartphone and tablets. There are platforms such as Exness and FXTM, which provide mobile apps that can be accessed both on Android and iOS devices.
NGX has developed an Application Programming Interface that provides third-party developers with an opportunity to integrate real-time market data into their applications. It supports various formats such as JSON and XML.
X-VPN: NGX also provides brokers with Virtual Private Network (X-VPN) services that offer low latency and secure access to the trading platform.
Criteria for Companies to List on Nigerian Exchange Group
| Criteria | Growth Board | Main Board | Premium Board |
|---|---|---|---|
| Entry Standard | Standard | Standard A, B, C | Standard C |
| Pre-tax Profits | No requirement | Cumulative pre-tax profits of at least NGN300 million over the last 3 years, with at least NGN100 million in 2 of those years | Cumulative pre-tax profits of at least NGN600 million over the last 1 or 2 years |
| Market Capitalization | Minimum of NGN50 million | Minimum of NGN500 million | Minimum of NGN4 billion |
| Free Float Requirement | Not specified | At least 20% of total issued shares | At least 20% of total issued shares |
| Number of Shareholders | Minimum of 20 public shareholders | Minimum of 300 public shareholders | Minimum of 300 public shareholders |
Indices Offered by the Nigerian Exchange Group
NGX 30 Index: NGX 30 Index tracks the performance of the 30 largest and most liquid companies listed on the NGX. It is capital weighted; that is, the index is more sensitive to changes in the movement of bigger companies.
According to the latest available data, the NGX 30 Index has been increasing, and the 1-year change was around 50.69%. The index value stood at 2,661.86, with a daily increase of 0.69%. Its 52-week range has been between 1,766.44 and 2,661.86.
NGX Oil & Gas Index: This is an index that reflects companies whose main business is undertaken in the oil and gas industry, which indeed is important to Nigeria in terms of contribution to her GDP and foreign exchange earnings.
NGX Banking Index: The NGX Banking Index includes major banks listed on the exchange.
Nigerian Exchange Group Regulatory Framework
Securities and exchange commissions – Apex regulatory authority for Nigeria capital market established to provide investor protection and fair ordered marketplaces
A paramount function of the commission incorporates the regulation of investment or securities businesses, oversight and general regulation of public offerings besides being in charge of adhering to financial regulations.
The role of the SEC is to enforce the laws governing the capital market, among them being the Investment and Securities Act of 2007 that gave it expanded powers in mergers, acquisitions, and cross-border transactions.
NGX Regulation Limited’s Responsibilities
NGX Regulation Limited is a subsidiary of the Nigerian Exchange Group with a role to regulate the market participants as well as ensuring adherence to the standards set.
Its responsibilities include overseeing the conduct of listed companies, enforcing compliance with listing rules and monitoring trading activities to prevent market abuses such as insider trading.
Compliance Standards
Listed companies in Nigeria are mandated to adhere to strict financial reporting standards as outlined by the SEC and NGX.
These requirements involve the presentation of quarterly and annual financial statements prepared in accordance with International Financial Reporting Standards. Companies are also required to disclose material information that may influence their stock prices.
Listing Activity and IPOs
New Listings in 2024
Recent listings have already made an impact contributing approximately NGN 179 billion to the exchange’s market capitalization. Key new entrants include the Nigerian Infrastructure Debt Fund, Mecure Industries and VFD Group.
IPOs
Potential Listings in Dangote Petroleum Refinery, Nigerian National Petroleum Company Limited, and other government enterprises should attract investor interest.
In fact, these listings will mimic the success of Dangote Cement and Dangote Sugar, which already dominate market positions.
Companies Delisted in 2024
There have also been delistings from the NGX. Ardova Petroleum had left the exchange in July 2023, and with more delistings that are expected in early 2024 for GSK Consumer Nigeria and PZ Cussons Nigeria.
Nigerian Exchange Group Trading Activities
Trading Volume and Value (2024)
Trading at the Nigerian Exchange Group picked up in 2024, with total trading volumes standing at around NGN 3.968 trillion by the end of the nine months.
It reflects growth in that compared with NGN 2.712 trillion the same period last year of 2023, it translated into year-on-year growth to around 46.3%.
Monthly statistics show the trades were worth NGN 493.01 billion recorded last September 2024 compared with a 66.67% rise in September 2023.
The increase of the trading volume is the reason attributed to the trading done by domestic investors; as it comprised 82.44% of all trading while foreign investors also managed 17.56%.
Most Traded Securities
Japaul Gold and Ventures took the lead in volume with 72 million shares traded. Other leaders are United Bank for Africa with approximately 67.9 million shares and Access Holdings, which had around 53.6 million shares traded.
Institutional vs Retail Participation
Retail investors have dominated the trading activities of the session, having performed transactions valued at about NGN 1.739 trillion. This is against the NGN 1.531 trillion performed by institutional investors in the same time frame.
This reflects the increased retail participation, which was at about 28% more than the institutional transactions in September 2024. The retail transactions jumped by 59.42% from August to September.
Foreign Direct Investment in 2024
Total foreign direct investment inflows in Nigeria in 2024 have seen an increase as it stood at $3.4 billion in the first quarter, compared with $1.1 billion in the same period in 2023.
In the second quarter of 2024, FDI dipped to a low level of $29.83 million, its lowest point since 2013. Naira devaluation and a less stable foreign exchange market are partly responsible for deterring long-term investments, even though these factors are able to attract short-term portfolio investments.
Total foreign participation in the trading activities of NGX amounted to approximately 17.56% of the total transactions conducted in 2024.
More Latest News About Nigerian Exchange Group in 2024
In the first ten months of 2024, foreign investors’ transactions on the Nigerian Exchange Limited hit ₦744.34 billion, a 156% increase year-on-year compared to ₦291.38 billion in the same period in 2023.
The Nigerian stock market has recorded a Year-to-Date growth of 31.34%, making it one of the top four performing exchanges in Africa as of December 2024.
According to a report by FMDQ, domestic investors traded close to ₦3.73 trillion worth of equities during the first ten months of 2024. Retail investors accounted for ₦1.91 trillion, while institutional investors took up ₦1.81 trillion.
The Central Bank of Nigeria has made some aggressive Monetary Policy Rate hikes and foreign exchange market reforms aimed at stabilizing the naira and curtailing inflation.
The Nigerian Exchange Group unveiled NGX Invest, a digital platform that has been approved by the Securities and Exchange Commission to ease public offerings and rights issues.
Trading on the NGX picked up with a reported 44% increase in volume compared to the previous trading days.
The Ghana Stock Exchange Composite Index leads with a YtD return of 51.38%, followed by the Malawi Stock Exchange at 48.86%.
As of October 2024, Nigeria’s inflation rate stood at 33.88%, up from 28.2% in November 2023.
Corporate actions include FBN Holdings leveraging NGX Invest for a ₦150 billion rights issue and Norrenberger’s Islamic Turbo Funds debuting on the exchange.
FBN Holdings successfully leveraged the newly launched NGX Invest platform to raise ₦150 billion through a rights issue.
The Gombe State government has readied a green bond of ₦30 billion in boosting agriculture and the development of infrastructure.
The NGX celebrated International Women’s Day globally on March 8, 2024 by organizing a Closing Gong Ceremony with the theme “Accelerate progress and bridge the gap toward women’s equality”.
Retail investors of the NGX concluded trades totaling ₦288.10 billion in September 2024 while institutional investors achieved a trade sum of ₦163.50 billion.
Aradel Holdings Plc floated its shares on NGX by introduction on October 14, 2024.
Foreign transactions on the NGX were at ₦744.34 billion for ten months of 2024. This was up 156% from last year’s equivalent period.
Also Read: Latest Kenya Startup News, Funding Updates and More – November 2024