Despite uncertainties building up to the 2023 elections, Nigeria’s stock market surprisingly closed the last trading day of the month in the green as investors continued to defy the weak macroeconomic environment. Although analysts had predicted that the market would not be affected by the tension during the trading month, a look at the year 2015 and 2016 saw the market badly affected by the heated polity.
Daily Sun analysis of the market’s performance showed that the All Share Index (ASI) , which is the average value of share prices of all companies, closed February at 535,806.26 points from an opening figure of 53,238.67 points.
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Furthermore, NGX’s market capitalization, which opened at N28.997 trillion, increased by N1.40 trillion to close the month under review at N30.400 trillion. It will be recalled that market capitalization had gained about N1.08 trillion in the previous month, this means that investors have now gained N2.48 trillion in January and February 2023 respectively.
At the close of trading yesterday, the year-to-date (ytd) return rose to 8.89 per cent as gains in Dangote Cement- who had an impressive outing in 2022, Zenith Bank and GTCO drove the market 0.86 per cent higher.
Analysis of yesterday’s market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 184.78 per cent. A total of 237.17 million shares valued at N4.39 billion were exchanged in 4,435 deals. Reacting to the performance of the market, Head of Finance and Investment Research at Meristem Securities, Abdulateef Grillo, noted that the market performed admirably well due to investors’ rebalancing their portfolios as well as impressive 2022 corporate earnings.
Grillo said, “The market was very positive and it is surprising because there are uncertainties that come up before elections. It did not affect market sentiments at all and this was due to investors rebalancing their portfolios and strong buying interest from investors as well as corporate earnings.
Although the market has remained on the positive side for the early start of the year. We still feel that equities could kick-start the month of March in a cautious way and we also feel that cash will be king for investors. However, we still have good corporate 2022 results coming in and so the market might trade sideways this month”.
For their part, analysts at Cordros Research, said, “We believe investors will be focused on the outcome of the highly anticipated 2023 Presidential elections. Thus, we see more of a “choppy theme” as cautious trading dominates the trading activities. Overall, we advise investors to seek trading opportunities in only fundamentally sound stocks as the weak macro story remains a significant headwind for corporate earnings”.
Source: Daily Sun