The leading 10` stockbroking firms in the Nigerian stock market raked in a whopping N20.212 billion in the third quarter of 2023.
This represents a significant increase from the same period in 2022 when the top 10 brokers earned N17.976 billion in commissions.
Despite concerns such as rising inflation, interest rate hikes, and apprehension surrounding the fallout of the 2023 general elections, investor confidence remained strong, leading to increased buying activity.
This was facilitated by the exchange of 116.341 billion shares, with a total value of N1.497 trillion, during the period under review.
This figure represents 54.92% of the total value recorded between January 1, 2023, and September 30, 2023, according to findings by Nairametrics.
The 116.341 billion shares accounted for 53.12% of the total volume transacted during the review period. These findings were published in the monthly broker performance report released by the Nigerian Exchange (NGX).
Among the stockbroking firms in Nigeria, Cardinal Stone Securities, Apt Securities, and Stanbic IBTC emerged as the top performers, collectively accounting for N753.021 billion in value and representing 50.3% of the total value of transactions conducted in the third quarter of the year.
- CardinalStone Securities secured the highest position in the ranking, with a transaction value of N359.885 billion, which accounts for 13.20% of the overall transaction value.
- Apt Securities & Funds followed closely with shares valued at N205.892 billion, representing 7.55% of the total transaction value. Additionally, Stanbic IBTC Stockbroker recorded an estimated value of N187.244 billion in trades accounting for 6.87%.
- Meristem Stockbrokers facilitated transactions worth N146.429 billion, while United Capital transacted shares valued at N138.161 billion during the third quarter of the year.
- Others are; FBN Quest Securities, EFG Hermes, Cordros Securities, Apel Asset, and Regency Asset Management, which facilitated deals valued at N114.473 billion, N110.336 billion, N101.896 billion, N67.481billion, and N65.422 billion respectively.
Brokers to earn big from commissions
A cursory analysis of the value traded indicates the top 10 brokers may have raked in about N20.212 billion in commissions collectively in the third quarter under review.
- Brokers often charge as high as 1.35% in commissions on trades although some charge lower depending on the size of transactions.
- However, this accounts for a growth of 12.44% over the commissions earned in the corresponding period of 2022 with a value of N1.332 trillion.
What you should know
Despite a challenging macroeconomic environment marked by high inflation, political uncertainty, and foreign exchange scarcity, the Nigerian stock market has shown remarkable resilience in the third quarter of 2023.
The All-Share Index (ASI) has gained 29.52% year-to-date (YTD) as of September to close at 66,382.14 index points in the third quarter of 2023.
This development has pushed the market to its 15-year high to outperform some emerging markets.
Analysts attributed the rally to the policies of the new administration of President Bola Tinubu, the harmonization of different exchange rates, and the floating of the naira.
Some stocks have performed remarkably well, posting triple-digit returns in the first nine months of the year. These are mainly companies with strong fundamentals, diversified revenue streams, and competitive advantages in their respective sectors.
NGX by sector performance: Further analysis of the data from the NGX shows positive performance across the sectors tracked.
- Specifically, the oil and gas index also gained 97.63%, while the consumer goods and Insurance indices gained 92.28% and 62.31% respectively.
- On the other hand, the banking index gained 59.57%, the industrial goods index increased by 10.80%, and the NGX Growth index grew by 54.14%, among others.
Investors gain massively: Despite the volatility in the economy during the period under review, some company stocks on the Nigerian Exchange printed impressive numbers.
Investors who bought these stocks at the beginning of the year would be smiling to the bank to cash out.
Outlook for the Rest of 2023
Speaking on the outlook of the Nigerian Stock Market, the Managing Director of Crane Securities Limited, Mr. Mike Eze said the market is expected to continue to benefit from attractive valuations, strong corporate earnings, and increased foreign investment.
Eze explained that the Nigerian stock market offers several attractive investment opportunities for investors who are willing to take on some risk.
- “Investors should carefully consider their individual risk tolerance and investment objectives before making any investment decisions,” he said.
The chief research officer of InvestData Consulting Limited, Ambrose Omordion urged the new government to pursue transformation reforms and policies vigorously to sustain performance.
- “We expect mixed sentiment on bargain hunting and portfolio repositioning ahead of Q4 in the face of sector rotation. All eyes are on the monetary policy drive of the New Central Bank of Nigeria (CBN) Governor and his team.
- “However, pullbacks are creating ‘buy’ opportunities amidst the economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer better investment direction to investors.
- “We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios. As such, investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe and domestically.”