In an impressive surge, Nigerian equities have achieved a remarkable net capital gain of N4.35 trillion in just five weeks. This remarkable market report, now commonly referred to as TinuBULL, can be attributed to the investor-friendly stance taken by President Bola Tinubu's administration.
Official trading reports and global stock market indices have confirmed Nigeria's remarkable climb, ranking it among the top three best-performing markets worldwide in the past five weeks. The sustained bullish run of Nigeria's benchmark equities index has propelled it to a 15-year high, driven by increased demand from both domestic and foreign investors.
There is a consensus that the performance of the Nigerian stock market is directly linked to the policy direction of the Tinubu Administration. The Nigerian Exchange (NGX) has stated that the market's success can be attributed to the "audacious macroeconomic reforms" implemented by the administration within its first 34 days. Market operators believe that the policies of President Tinubu's new administration have significantly contributed to the rise in investors' fortunes.
Within just one month, the Tinubu Administration has already made significant changes, including the cessation of the 46-year-old fuel subsidy, elimination of multiple forex rates, and launching probes into major public finance issues. President Tinubu, in his market-friendly inaugural speech on May 29, addressed concerns raised by investors regarding multiple taxations, returns repatriation, and foreign exchange.
The Nigerian equities market has experienced an average return of 15.09% in the first half of 2023, surpassing the six-month return of 18.96% for the overall equities market. The aggregate market value of all quoted equities has risen by N4.35 trillion in the past five weeks, representing approximately 82% of the total net capital gains of N5.33 trillion in the first half of 2023. This further highlights the significant impact of the Tinubu-triggered rally.
The All Share Index (ASI), which serves as the main benchmark for the Nigerian equities market, reached its highest level since 2008, closing at 60,968.27 points. This milestone, crossing the 60,000 index mark, underscores the strength of the ongoing rally. Prior to President Tinubu's inauguration on May 29, 2023, the ASI stood at 52,973.88 points.
The aggregate market value of quoted equities has risen from N28.845 trillion at the start of the Tinubu Administration to N33.198 trillion, showing a correlation of 15.09% with the ASI. This correlation confirms that the market value increase primarily stems from share price appreciation and real capital gains, rather than changes in the number of listed shares or corporate revaluation.
In a global year-to-date analysis of major advanced, emerging, and frontier markets, Nigeria has climbed to become the world's third best-performing market in terms of average return. With an 18.96% return, Nigeria trails behind Japan and Egypt, which recorded six-month average returns of 27.2% and 21.0% respectively.
Trading reports at the NGX indicate a shift in foreign investors' perception of the Nigerian market. The latest foreign portfolio investments (FPIs) report reveals a significant improvement in foreign investors' participation. Total FPI transactions have surged by 338.72%, driven by a substantial 649.6% increase in inflows.
The May 2023 FPI report, coordinated by the Nigerian Exchange (NGX), indicates a rise from a record low of N8.47 billion in April 2023 to N37.16 billion in May 2023, marking the highest level since June 2022. FPI inflows experienced a notable increase from N3.67 billion to N27.51 billion during the same period, while outflows rose by 101.04% from N4.80 billion to N9.65 billion.
The NGX attributes the May 2023 performance to the historic bullish rally triggered by President Tinubu's inauguration, widely regarded as a pro-market administration.
Experts have emphasized that the market's bullish momentum is a result of optimism surrounding economic reforms promised by the President Tinubu administration. Investors have been encouraged by the administration's commitment to facilitating easy repatriation of investments and profits.
Arthur Steven Asset Management analysts expressed that the equities market's positive trend can be attributed to the new administration's pro-market stance, which has generated high expectations among investors.
Overall, the Nigerian equities market has experienced significant growth in recent weeks, driven by investor confidence in the policies and reforms initiated by President Tinubu's administration.
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