Investors in Nigeria’s banking sector have reaped significant gains, totaling N544.807 billion, as the stock market concluded the trading week on a positive note. The banking sector index emerged as the best-performing index, driven by changes in Nigeria’s foreign exchange operational framework and the suspension of Central Bank Governor Godwin Emefiele, whose restrictive policies had impacted bank earnings.
President Bola Tinubu’s announcement of a list of technocrats as special advisers for his economic team further shaped investor sentiment, contributing to the positive market outlook.
The Nigerian Exchange Limited (NGX) witnessed a 12.59% increase in the banking sector index, culminating in substantial gains for investors. The surge was in response to the alterations made in Nigeria’s foreign exchange operational framework and the removal of Governor Godwin Emefiele, who had overseen policies that constrained bank earnings.
President Bola Tinubu’s introduction of technocrats as special advisers for his economic team was well-received by investors, bolstering confidence and driving the market’s upward trajectory.
The NGX All-Share Index and Market Capitalization also experienced significant growth, appreciating by 5.49% to close the week at 59,000.96 and N32.126 trillion, respectively. With the exception of the NGX Industrial Goods and NGX Growth indices, which experienced slight depreciation of 1.63% and 1.07%, all other indices concluded the week on a positive note. The NGX ASeM index remained unchanged.
Analyzing the performance of fourteen banks listed on the Nigerian Exchange Group, notable gainers included Zenith Bank Plc, Access Holdings Plc, FBNH Plc, UBA Plc, GTCO Plc, Stanbic IBTC Holdings Plc, and ETI Plc. These banks collectively accounted for 68.61% of the combined gain in market capitalization, amounting to N373.810 billion.
Among the highlighted banks, ETI Plc recorded the highest gain, with a market capitalization increase of N51.379 billion, followed by FBNH with N61.021 billion, GTCO with N76.521 billion, Stanbic IBTC with N90.698 billion, and Zenith Bank with N94.189 billion.
Financial analysts have attributed the banking sector’s appreciation to the anticipated cleanup program initiated by the president at the Central Bank of Nigeria (CBN). The reforms in monetary and forex policies are expected to attract foreign portfolio investments, leading to increased market participation.
Investors’ sentiment reflects confidence in the banking sector’s potential cleanup, driven by the president’s actions. The international response to the suspension of the CBN governor is anticipated to influence the domestic market, with the acting CBN governor’s future actions also shaping market dynamics moving forward.
