“In eight months of Tinubu administration, Nigeria’s stock market leads the world by Bayo Onanuga” – the Nation newspaper.
My comment: The Nigeria stock exchange (NGX) has been growing on absolute Naira, but on the real value, it is not. That statement is factual but the irony is that the growth, as noted by Bayo, has made many people poorer and depressed the overall value of the stock market. That is why foreign investors are not coming for that 45% gain because if you made 45% on equity, but lost 50% on currency, with 30% on inflation, you are poorer.
One thing is clear: the ability to make more Naira in Nigeria has never diminished for years because there are opportunities in Nigeria. The issue is making the Naira under a stable currency when benchmarked with other global currencies. That way, if you are importing funds into Nigeria, you can win as shares of companies accelerate.
For one thing: this shows how rigged the Nigerian economy is. For all the pains people are going through, the fortunate few like most of us here are still logging a 45% increase in the stock market. If they offer that as an option in an ICAN exam, asking most Nigerians to pick that in the last five years that our market has returned 20% on yearly average, do not expect them to pass that exam.
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Yet, if you are looking for one thing to commend Buhari, look at some of the reforms in the stock exchange. He transformed it from a quasi NGO to a demutualized profit making institution which shows that reforms do work! Yet, this is not to tell anyone to go and buy anything (just a village guy sharing info): our stock exchange is over-concentrated on power and risk, as 10 companies out of the 155 there command more than 70% of the total market cap.
Analyzing further, Nigeria has about 25 real companies in the stock exchange, as the top 25 combine for most of the value with the other 130 marking ‘present” and nothing more, and that position does not change which shows lack of innovation and creative destruction.
The finest Nigerian companies like Moniepoint and Flutterwave are not yet there, and we have to find ways to get them in the NGX party. But one thing is constant: do not bet against Nigeria!
“In eight months of Tinubu administration, Nigeria’s stock market leads the world by Bayo Onanuga” – the Nation newspaper.
My comment: The Nigeria stock exchange has been growing on absolute Naira, but on the real value, it is not. That statement is factual but the irony is that… pic.twitter.com/9IHRro16i9— Ndubuisi Ekekwe (@ndekekwe) January 21, 2024
Data source: Rewane’s 2024 Economic Outlook (Jan 2024)
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If you had borrowed $5 million in 2021 and invested same in Nigeria’s Stock Exchange, will the 46% growth compensate for differential in dollar-naira over the period? That should settle the debate.
$5 million today is over N6.5 billion, something that was around N2 billion or so in 2021? And we are talking about 46% growth. We obviously don’t understand numbers here. You need like 300% growth to relate well. Enough of the noise please.