Nigerian Stocks gain 5.23% after inauguration speech

Nigerian Stocks gain 5.23% after inauguration speech

Nigeria Stock Exchange
Nigeria Stock Exchange

Nigerian stocks experienced a remarkable surge of 5.2% following President Bola Ahmed Tinubu’s inauguration speech, leading to a euphoric market atmosphere affectionately dubbed the “TinuBULL.” In a single day, stocks gained an impressive N1.5 trillion, marking one of the highest one-day gains in recent memory. All indices reflected positive gains, with NGX30, NGX Banking, and NGX Industrial posting gains of 5.58%, 8.2%, and 6%, respectively.

Investors exhibited a bullish mindset, as evidenced by a significant increase in the number of deals recorded, up by 56.38% to 9,916. Trading volumes also soared by 133.5%, while market turnover rose by 10%. The market capitalization of the All Share Index surpassed the N30 trillion mark, reaching N30.35 trillion. Year to date, the All Share Index has experienced an impressive 8.77% growth.

Among the top 10 gainers, eight stocks achieved a 10% increase, including Zenith Bank, FCMB, Transcorp Hotel, and NB. Additionally, the FUGAZ group, comprising Access Bank and other prominent stocks, emerged as top-traded stocks by value, with Access Bank leading the pack at N2.4 billion in trade.

Market operators anticipated this positive response, attributing it to President Tinubu’s favorable policy announcements during his speech. The president addressed pressing issues such as high-interest rates, multiple exchange rates, slow GDP growth, and restrictions on repatriating foreign investors’ dividends. His intention to tackle these challenges resonated well with market operators, leading to the impressive 5.2% gain in the All Share Index.

Market experts predict that this momentum will persist as investors digest the implications of the government’s policies. Despite potential short-term challenges, market operators believe that the economy will ultimately benefit in the medium to long term. The smooth handover of government power instilled positive confidence in the market, further enhancing the market sentiment.

Drawing a parallel to the 2015 market surge following President Buhari’s victory, where stocks gained for ten consecutive days, the current market upswing reflects similar optimism. Notably, the exchange rate strengthened during that period, and stocks closed March and April with gains of 5.45% and 9.33% respectively. While the subsequent months experienced declines, stocks are currently up by 6.38% in May 2023, potentially marking the best monthly gain since December 2023.

President Tinubu’s commitment to reviewing monetary policy, including a call for a unified exchange rate and reduced interest rates, has been met with widespread positivity among market operators. They believe these measures will contribute to positive economic change, further fueling the optimistic outlook for Nigeria’s stock market.

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