As 2023 drew to a close, the Nigerian Exchange Limited (NGX) witnessed a remarkable surge, achieving a year-end high propelled by a resurgence in investor confidence across listed companies. Particularly noteworthy was the outstanding performance of the oil and gas index, which recorded an impressive 125 per cent gain throughout the year.
This surge in the oil and gas sector can be attributed to a confluence of factors, notably a series of policy reforms initiated by President Bola Tinubu’s administration since his inauguration in May.
A pivotal move was the discontinuation of the costly fuel subsidy program, a long-standing contentious initiative draining public coffers. This strategic decision towards fiscal prudence not only reignited interest in energy stocks on the NGX but also prompted a widespread upswing across various sectors, significantly bolstering market liquidity.
As the year concluded, the NGX Exchange reported a substantial year-on-year increase of 45.90 per cent, reaching 74,773.77 index points. Simultaneously, market capitalization experienced a noteworthy uptick, closing the year at N40.92 trillion—an increase of N13 trillion year-on-year.
The positive market sentiment observed among investors is attributed to various factors, with key influences being the favorable policies implemented by President Bola Tinubu’s administration. These policies include 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.
The oil and gas index, reflecting the performance of quoted oil and gas firms on the NGX, surged by an impressive 125.5 per cent or 580.58 basis points, concluding the year at 1,043.06 index points—an ascent from the opening index of 462.48 in January 2023. Prominent companies in this index include 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, witnessing an increase of 114.89 per cent or 479.7 basis points, closing the trading year at 897.20 index points—an ascent from the initial figure of 417.50 in January.
Key drivers for the surge in these indices were advancements in the share prices of Japaul Gold, MRS, Seplat Energy, Total Energy, Eterna, and Conoil.
Delving into the year-to-date performance of these companies as of December 29, 2023, reveals impressive figures. Japaul Gold led the pack with a gain of 507 per cent, followed by MRS at 645 per cent, Conoil at 217 per cent, Oando at 168 per cent, Seplat at 110 per cent, Eterna at 107 per cent, and Total Energy at 99.48 per cent.
Market operators, reflecting on the year, noted the eventful and bullish nature of the market in 2023. Tajudeen Olayinka, CEO of Wyoming Capital and Partners, highlighted the market’s confidence in a private sector-centric president, specifically pointing to President Bola Ahmed Tinubu’s inaugural speech and policy initiatives as catalysts for unlocking long-suppressed market-wide confidence.
Executive Vice Chairman of Hicap Securities Limited, Mr. David Adonri Highcap, added that equities had appreciated year-to-date by about 45 per cent, with the Oil/Gas sector leading the way with a remarkable 125 per cent gain. He further detailed the breaking of several market records, showcasing the robust performance of the equities secondary market in 2023.
