Governments and private companies have raised about N8.6 trillion through the capital market in the past 13 and half months.

Data by the Nigerian Exchange (NGX) obtained by The Nation at the weekend indicate that the capital market provided more than one-fifth of the Federal Government’s fiscal expenditures during the period.

Many companies also used the capital market for major corporate restructuring.

A breakdown indicated that the Federal Government accounted for about N6 trillion in new listings while companies raised about N2.6 trillion.

The market provided nearly N2.5 trillion for the banking and brewery sectors alone.

Particularly, the banking sector, which started a two-year recapitalisation last year, raised about N1.23 trillion in approved new equities funds.

Also, the brewery sector, which came under intense recapitalisation pressure due to foreign exchange (forex) reforms, raised more than N1.06 trillion in the two largest corporate equity raisings during the period.

The fundraisings underscore the depth of the domestic capital market to cater to large-ticket transactions as well as other categories of issuances from small to mid-tier issuers.

Sovereign issues listed by the government included ordinary savings and Sukuk bonds, altogether amounting to about N6 trillion.

In terms of the total amount and size of issues, the government topped the list with the highest debt issuance of N873.53 billion.

Other large issuances by the government included N621.38 billion, N595 billion, N464 billion and N350 billion Sukuk.

The largest capital raisings in the corporate sector were Nigerian Breweries’ N548.7 billion equity, International Breweries’ N516.22 billion and Access Holdings’ N351.01 billion.

Companies that listed new equities and debts during the period included Jaiz Bank Plc, Notore Chemical Industries Plc, Wema Bank Plc, FCMB Group, Guaranty Trust Holding Company, Lasaco Assurance, Tantalizers Plc, Multi-Trex Integrated Foods Plc, Cadbury Nigeria Plc, VFD Group, and Ellah Lakes.

The mix of new corporate issuances from banking and agriculture to manufacturing, insurance, and financial services underscores the broad appetite of the investing public.

Market analysts said the domestic capital market has the depth and liquidity to drive the government’s $1 trillion economic agenda. They cited the bullish runs at the primary and secondary markets.

Group Chairman, Nigerian Exchange Group (NGX Group) Plc, Umaru Kwairanga said the capital market plays a crucial role in mobilising investment and securing long-term financing for critical projects.

“The capital market serves as a vital enabler, providing access to financing that will drive industrialization, infrastructure development, and overall economic prosperity,” Kwairanga said.

Group Managing Director, Nigerian Exchange Group (NGX Group) Plc  Temi Popoola said the NGX would continue to leverage technology and innovation to support private and public sector financing.

Popoola said, “We are building an Exchange that extends beyond traditional securities trading. By leveraging technology, we are enhancing market accessibility, attracting capital, and creating new investment opportunities. Our goal is to develop a dynamic, inclusive, and globally competitive capital market that supports national and subnational economic growth.”

Chief Executive Officer, Nigerian Exchange (NGX) Jude Chiemeka underlined the Exchange’s role in supporting governments with market-driven financial solutions, especially state governments, which have shown relatively low recourse to the capital market.

“The Exchange remains committed to working closely with subnational governments to structure tailored financial instruments that align with their development priorities,” Chiemeka said.

Chartered Institute of Stockbrokers (CIS) President Oluropo Dada stated that the capital market was poised to make pivotal contributions to the achievement of the $1 trillion economic target of the government.

He called for supportive policies to encourage more companies and governments to utilise the capital market for their financing programmes.

The performance of the primary market segment further highlighted the bullishness of the Nigerian market, which had recorded a full-year return of 37.65 percent in 2024, one of the three highest returns across the global markets.

The average year-to-date return so far this year stands at 4.98 percent, equivalent to a net capital gain of about N3.13 trillion.

The performance of the Nigerian market in 2024 was boosted by a substantial increase in foreign portfolio investments (FPIs) and sustained demand from local investors. Foreign capital inflow had risen steadily from a low of about four percent in mid-2023 to an average of about 16 percent.

Average returns in the Nigerian market surpassed returns in advanced markets by more than 15 percentage points and more than quadrupled average returns across frontier and emerging markets. Advanced markets of the Americas and Europe recorded an average return of some 21 percent, while frontier and emerging markets posted average gains of about six percent and eight percent, respectively.

The 12-month return of 37.65 percent implied that investors in Nigerian equities netted capital gains of N15.41 trillion during the year. The stock market performance underlined equities as hedging securities, with an inflation rate of 34.60 percent and a benchmark interest rate of 27.50 percent.

The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Exchange (NGX), closed yesterday at 102,926.40 points as against its year’s opening index of 74,773.77 points, an increase of 37.65 percent, or N15.41 trillion.

Aggregate market value of all quoted equities at the NGX also rose from the year’s opening value of N40.918 trillion to close at N62.763 trillion, an increase of N21.85 trillion or 53.39 percent.

Experts attributed the upbeat at the stock market to the increasing attractiveness of the Nigerian market to foreign investors, ongoing economic reforms, resilient earnings by Nigerian companies, exchange rate differential, ongoing banking recapitalisation and the reform in the oil sector.

Managing Director, AIICO Capital  Femi Ademola said Nigerian equities have become very attractive to both foreign and domestic investors.

“The equities market has become very attractive, mostly due to the devaluation of the currency which makes the shares very cheap, especially to foreign investors. The very strong half-year performance reported by corporates especially banks and the corporate actions that followed the announcements have also driven many investors to the equities market. Finally, the lack of volatilities in the bond market makes it unattractive to investors, thus they flock to the equities market,” Ademola, a chartered financial analyst said.

Culled from The Nation