Key questions this article answers:

  1. Nigeria’s equity market (a.k.a the NGX) appreciated 7% during the first quarter of 2023. What factors contributed to these gains? 

  2. Can NGX’s positive performance continue in the year's second quarter?


Fresh from my Christmas holiday, my first article in 2023 was an outlook on the performance of the Nigerian equities market (i.e. the NGX) following its 20% appreciation in 2022.

The conclusion was a positive NGX performance, premised on increased domestic investor participation. This positive outlook was, however, vulnerable to downside risks emanating from the outcome of the recently concluded 2023 Presidential elections and more aggressive monetary policy tightening (i.e. higher interest rates).

Nevertheless, following a turbulent election period and president-elect Bola Ahmed Tinubu, emerging winner, we (Stears) maintained our positive NGX outlook despite being less optimistic. This was because data from Stanbic IBTC showed Nigeria’s Purchasing Managers Index (PMI)—a performance measure of the private sector’s productivity, declined. 

The fall in PMI (from 53.5 points in January to 44.7 points in February 2023—with 50 being the benchmark) reflected the negative impact of naira scarcity. It confirmed fears of an economic slowdown in an already fragile nation—yet another problem for the president-elect to deal with.

That said, the NGX started the year with a 3.7% month-on-month (m/m) appreciation in January, then a 4% m/m rise in February before declining 1.98% in March.