With a current year-to-date return of 41%, the Nigerian Exchange in 2023 is on track to exceed its last year’s performance.
In a year filled with economic lows ranging from high inflation rate to stagnant GDP growth, the NGX has stood out as a significant positive in the Nigerian economy as it has grown at a rate that outpaces inflation.
Based on the cumulative market capitalization of each segment as well as the segment indices, Nairametrics has tracked the fastest-growing segments in the NGX in 2023.
Here are the top 10 fastest-growing segments in the NGX.
Insurance – 67.37%
With a total market cap of about N227.4 billion, up from N135.9 billion at the start of 2023, the insurance segment in the NGX has appreciated by 67.37% year-to-date. The NGX Insurance index also closed the week ending December 8 with a year-to-date growth of 69.28%.
Some of the significant companies in this segment include AXA Mansard, which has appreciated by 129.5% year-to-date, and Cornerstone Insurance which has a YTD return of 140%, as well as a year-on-year profit growth of over 2600% in 9M 2023.
Banking – 72.17%
Banking stocks have been one of the best performers in the NGX this year. In 2023, GTCO and Zenith Bank crossed into the SWOOT category as they both appreciated by 70% and 38% respectively. FBN Holdings and Stanbic IBTC also made brief entries into the category of stocks worth over N1 trillion.
With a total market cap of N6.15 trillion, stocks in the banking segment have cumulatively appreciated by 72.17% year-to-date, with the best performers among them being UBA, which appreciated by 179% YTD, Sterling Bank which appreciated by 154% YTD, Fidelity Bank, 125% YTD, and Stanbic IBTC, 86% YTD.
Consumer Goods – 93.70%
The consumer goods segment has displayed a strong showing in the NGX this year primarily due to BUA Foods Plc. BUA Foods Plc which is Nigeria’s largest consumer goods company by market capitalization has appreciated by about 206% year-to-date, thus covering up the unimpressive market performance by other consumer goods companies in the NGX.
Another consumer goods company that has displayed an impressive showing in the NGX in 2023 is Dangote Sugar, which has appreciated by 261% year-to-date to hit a market cap of over N700 billion.
Hit by massive losses due to forex exposure as well as other operational cost increases, breweries in Nigeria have recorded declines, with Guinness Nigeria declining by 2% YTD, Nigerian Breweries declining by about 9.6%, and Champion Breweries declining by 36% YTD in the NGX.
Real Estate/Construction – 112.08%
The 112.08% year-to-date growth in the Real Estate/Construction segment of the NGX was primarily driven by the listing of the N200 billion Nigeria Infrastructure Debt Fund.
As of December 8, the NIDF had a market cap of N92.5 billion, making it the largest listed equity among the real estate/construction stocks. Other notable stocks in this segment include Julius Berger Nigeria and UPDC REIT.
Oil/Gas – 114.72%
Driven by rising oil prices and increasing prices of petroleum products in Nigeria, oil and gas stocks listed on the NGX have cumulatively appreciated by about 115% this year.
Growth in the segment was driven by the upstream energy company, Seplat Energy Plc which appreciated by 110% to cross into the N1 trillion threshold. MRS Oil is another worthy mention as the downstream petroleum company’s shares have appreciated by about 680% this year.
Despite the delisting of Ardova Plc and the proposed delisting of Oando Plc, stocks in the oil and gas segment of the NGX have put up an impressive showing this year.
ICT Services – 147.41%
Though these stocks can be rated as “penny stocks” in the NGX, their impressive performance is worthy of note. Cumulatively, companies listed in the ICT services segment of the NGX have appreciated by 147.41%. The top two best-performing stocks in Nigeria are part of this segment, Chams Plc and CWG Plc which have both appreciated by 909% and 729% respectively.
The growth experienced by companies in this growth is tied to the overall growth of the ICT sector in the Nigerian economy, evidenced by the boom of mobile banking in the country. These companies have also set up subsidiaries as a means of cutting their piece of the pie which is fintech. While Chams set up Kegow, a mobile money operator, CWG set up Fifthlab.
Services – 161.55%
The services segment is a combination of companies in hospitality, media, publishing, logistics, and transportation, among other sectors.
The segment has cumulatively grown this year by 161.55%, primarily driven by Transcorp Hotels which has appreciated by 610% this year. In 9M 2023, Transcorp Hotel recorded a year-on-year growth of 177% in its net income.
Power – 167.79%
While we await the listing of other power companies on the NGX, Geregu Power Plc, the sole power company on the NGX will be used as a measure for the power segment.
Geregu Power Plc has appreciated by 167.8% this year to reach a market cap of N997.5 billion. For 9M 2023, the company’s pre-tax profit experienced a year-on-year growth of 25%, while its revenue grew by 42%.
Healthcare – 192.40%
As we await the delisting of GSK shares from the NGX, the gains recorded by the company on the NGX in 2023 are noteworthy. GSK appreciated by 169% on the NGX this year.
Propelled by the listing of Mecure Industries Plc on the NGX, the healthcare segment on the NGX grew by a whopping 192%. Outside Mecure and GSK, Fidson Healthcare also posted an impressive showing on the NGX this year, appreciating by 80% year-to-date.
With an impressive year-to-date return of 167%, Neimeth International is another healthcare company with impressive returns in the NGX this year.
Conglomerates – 335.76%
Driven by the 518% growth of Transnational Corporation Plc (TRANSCORP) this year, the conglomerate segment is the fastest growing segment in the NGX with 335.76% year-to-date returns.
UACN, another impressive conglomerate grew by 65% this year, while John Holt Plc grew by 153.5%.
What you should know
The two largest segments in the NGX, the industrial goods segment, and the telecommunications segment do not appear because of their sheer size and much smaller growth rate compared to smaller segments in the NGX.
However, the appearance of the banking segment on the list is a testament to the level of growth experienced in the segment. Growth in Nigerian banks this year was driven by record profits on the backs of astronomical interest income.
This report indeed is a great revelation unto the potential of our capital market as a driver to the overall economy.. This report is really worthy to be kept as a reflection to Nigerian economy.
Kudos to you Sir Mr Olujinmi
Growth due to new listing is of no impact. But growth due to price advances are portfolio friendly. Meanwhile, what are those factors driving the prices of Ellah Lakes, Multiverse, Omatek, on the exchange.
Lastly,when are we starting to trade equities on FMDQ. This is the best time as NGX refuses to sit up and still engaged in price manipulation and executive lawlessness
The average return on investment in the country is always imperasive compared to other nation. Unfortunately, the returns rar eroded by inflation, devaluation and other factors making the return poor.