Investors in Nigeria’s top banks have gained ~$1.2bn this year

BREAKING NEWSOctober 12, 2023 at 10:56 AM UTC

Shareholders of tier 1 banks in Nigeria collectively enjoyed a significant gain of N1.296 trillion (~$1.2 billion) during the first nine months of 2023. This was despite challenges such as rising inflation, interest rate hikes, and uncertainties associated with the 2023 general elections.

Broadly, the Nigerian Stock Exchange (NGX) All-Share Index closed the third quarter of the year on a positive note, seeing a notable appreciation of 29.52% that culminated in a closing value of 66,382.14 index points, marking a 15-year high.

This surge in market performance reflects the prevailing positive sentiments among investors. Analysts cited by Nairametrics believe that the renewed interest in the local stock market can be attributed to a desire to maximize capital gains, given the relatively low stock prices resulting from financial market turbulence and the build-up to the 2023 general elections.

Key Takeaways

Historically, the banking sector has thrived in environments marked by inflation and interest rate hikes, making it a favorable sector for investors. As of September end, the NGX banking index had appreciated by 59.57%, from 417.50 points at the beginning of the year to 666.22 points, highlighting the sector's strength and attractiveness. Market experts are optimistic about the sector's prospects from a macroeconomic perspective. So far, several factors have contributed to this impressive performance including the policies to harmonize different exchange rates and the floating of the naira.