TWO of Nigeria’s banks have joined the league of companies with over N1 trillion capitalisation on the Nigerian stock market, as the all-share index (ASI) rose by 3.57 per cent on Tuesday, January 9.
The market capitalisation of Access Holdings and FBN Holdings rose to N1.06 trillion and N1.03 trillion, respectively, at the close of Tuesday’s trading session, hitting the N1 trillion mark.
The United Bank for Africa (UBA) had, on Monday, January 8, joined the elite group, making it five of Nigeria’s banks currently with a market capitalisation of over N1 trillion.
At the close of trading on Tuesday, Zenith Bank, Guaranty Trust Holding Company (GTCO) and UBA market capitalisation stood at N1.49 trillion, N1.42 trillion and N1.11 trillion, respectively.
Other companies in the category of over N1 trillion market capitalisation on the Nigerian stock market include Airtel Africa with N7.52 trillion, MTN Nigeria Communications with N6.19 trillion, Dangote Cement with N5.74 trillion, Seplat Energy with N1.36 trillion, BUA Cement with N3.45 trillion, and BUA Foods with N3.74 trillion.
Meanwhile, trading activity at the Nigeria Exchange Limited (NGX) floor continues to be bullish as it rose by 3.57 per cent to close at 83,191.84 basis points on Tuesday.
In comparison, the overall market capitalisation also increased by 3.56 per cent to close at N45.52 trillion as investors gained N1.57 trillion in one trading session.
The Nigerian stock market has remained bullish since the beginning of the year, recording a year-to-date return of 11.26 per cent and gaining N4.6 trillion after an impressive performance of over N13 trillion gain in 2023.
Despite the trillions of naira the market is making, analysts believe that the Nigerian stock market is still disconnected from the broader economy.
Speaking on Tuesday at Arise TV’s Global Business report, the former Managing Director/Chief Executive Officer of Nigeria Inter-Bank Settlement System Plc (NIBSS), Paul Lawal, said he believed the Nigerian economy was disconnected from the country’s standard of living.
According to him, the growing rate of the NGX depicts the increase in business activity resulting from the rise in the unit price of shares.
“Take, for example, somebody who sells loaves of bread. He sells 500 loaves of bread at the rate of N100, which is N50,000. But if a loaf is now N1,000, the 500 loaves of bread will be N500,000. So, sometimes we have high volumes not because productivity has increased but because the price has increased,” Lawal explained.
However, he stressed that the rate at which prices were rising and the currency’s value dropped did not match the rate at which income increased for individuals.
“So, to have real growth in the economy is when you increase the numbers of units of production,” Lawal said, noting the gross national product as one of the major indices used in measuring the health of an economy, as it reflects the total performance of the goods and services vis-à-vis the number of people in a country.
“If pricing goes up and the number of goods or services has not increased, we have a disconnect. I think there is a major disconnect in Nigeria’s economy,” the former NIBSS boss added.