Nigerian stocks hit a 13-year high on Thursday after stocks experienced 3 straight days of solid gains rallying the All-Share Index past 45,000 points for the first time since 2008.
At the time of closing on Thursday, the All-Share Index which measures the performance of all stocks recorded a gain of 1.1% to close at 45,890.52. The All-Share Index first blew past the 45k ceiling on Wednesday when it closed at 45, 430.14
The All-Share Index has now gained a whopping 7% this January with 7 more working days to go. Last year, the Nigerian stock market returned 6.07% as stocks faced multiple headwinds from regulatory pronouncement to high inflation and a devalued naira. However, this year, stocks seem to have found momentum as investors position early on to take advantage.
Highest since 2008
The last time the Nigerian All Share Index was above 45,000 points was in September 2008, about 159 months ago, right on the cusps of the great stock market crash that has remained a sad reminder of how risky equities in Nigerian can be.
In September 2008, Nigerian All Share Index was 46, 216.1 and was facing its 7th consecutive month of decline. By the next month, stocks plummeted 21.4% to 36, 325.9 triggering a slippery downfall that will bottom out in February 2013.
It has now taken over 13 years for stocks to recover the losses over the years which is adjusted for devaluation and inflation could take a lifetime. Most of the stocks that held sway in 2008 have either gone bust or had their share prices cut in half.
Why the rebound
- The stock market rebound in recent years is partly due to new mega listings such as MTN, BUA Cement, BUA Foods, Airtel, Dangote Cement (listed 2010), each of which is valued at over a trillion naira.
- The stock market has also recorded notable mergers such as that of Access Bank and Diamond Bank.
- Despite the rebound, stocks are still far off their all-time highs of 65,652 recorded in February 2008, when stocks peaked to an all-time high.
The earnings season will commence in earnest in a couple of weeks as most stocks start to publish their full-year results for the financial year ended December 2021.