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Business News of Monday, 5 September 2022


ICT gains N4.1 trillion in 8 months to remain largest sector in Nigeria’s stock market

Telecommunication Telecommunication

The Information Communication and Technology (ICT) sector ranked as the most capitalized sector on the Nigerian Exchange (NGX) as of the month of August, with N11.74 trillion aggregate market capitalization. This is according to data gleaned by Nairalytics – the research arm of Nairametrics, from the website of the NGX.

The sector gained N4.12 trillion in the first eight months of the year to shore at N11.74 trillion, an increase from N7.62 trillion recorded as of the end of December 2022. The sector comprises of ten listed companies, although only two of them are household names, as they are the biggest telcos in the country – MTN Nigeria and Airtel Africa.

The significant gain recorded by the sector is largely due to the N4.08 trillion gain in the market valuation of Airtel Africa, having overtaken the likes of Dangote Cement and MTN Nigerian in January 2022 to become the largest company listed on the stock market.

Airtel maintained the position as the most valuable company listed in the local bourse with a market capitalization of N7.7 trillion, gaining over N4.08 trillion between January and August 2022, bringing the total stock market value to over N26 trillion.

Of the 13 sectors in the Nigerian stock market, only four of them are valued above N1 trillion. The sectors are ICT, Industrial goods, Consumer goods, and banking.

ICT sector growing at a rapid pace

A look at Nigeria’s GDP for the second quarter of 2022 indicates that the information and communication sector, which comprises of telecommunication, publishing, motion picture, sound recording, music production, and broadcasting accounted for 18.4% of the nation’s economy, and it was largely due to the growth of the telecommunication sector.

The sector recorded a 6.5% year-on-year real GDP growth in the second quarter of the year compared to the 5.56% growth recorded in the corresponding period of 2021. Similarly, on a quarter-on-quarter basis, the ICT sector grew by 13.41% in real terms.

A cursory look at the data in the past 10 years also shows impressive growth in the country’s ICT sector. Notably, the sector recorded an estimated GDP of N6.27 trillion in 2012 and has surged to N11.39 trillion in 2021, indicating an increase of N5.12 trillion in 10 years.
Interesting to add that the telecommunication sector, where the internet and mobile network service providers fall under, accounts for 81.3% of the ICT sector.
Top sectors by Market capitalization

ICT – N11.74 trillion

The ICT sector ranks as the most valuable sector in the Nigerian stock market with a valuation of N11.74 trillion, representing an increase of N4.12 trillion year-to-date. The sector has Airtel and MTN Nigeria as the predominant players listed under this category.

Airtel Africa, which is the most capitalized company on the NGX with a valuation of N7.77 trillion, is worth more than the other nine companies in the sectors combined. It is interesting to add that two of the three most capitalized companies in the market are telecommunication (ICT) companies.

The reference sector accounts for 44.2% of the total equities market capitalization. Other companies in the ICT sector include E-transact, CWG, Courteville, Chams, Omatek, Tripple Gee, NCR, and Briclinks Africa.

Industrial goods – N6.39 trillion
The industrial goods sector is the second most capitalized sector in the Nigerian stock market with a valuation of N6.39 trillion, having lost N696.7 billion year-to-date from N7.09 trillion recorded as of the beginning of the year.

The sector’s capitalization is pushed by Dangote Cement’s N4.17 trillion and BUA Cement’s N1.76 trillion valuation, both of which are members of the SWOOT (Stocks worth over one trillion). The three major cement producers in Nigeria are the most capitalized companies in this sector, that is with the inclusion of Lafarge Africa.

Meanwhile, other companies in this sector are Beta Glass, Cap Plc, Cutix, Austin Laz, Berger Paints, Premier Paints, and Meyer.

Consumer goods – N3.38 trillion

The consumer goods sector with a valuation of N3.38 trillion ranks as the third most capitalized sector in the stock market. Its valuation rose from N3.14 trillion recorded as of the beginning of the rear, representing a gain of N235.9 billion.

The likes of Nestle and BUA Foods kept the sector’s capitalization elevated with the valuation also being above a trillion naira. Nestle Nigeria boasts of a total market valuation of N1.07 trillion as of 31st August 2022, while BUA Foods has a capitalization of N1.05 trillion.

Other companies in the sector include Nigerian Breweries, Dangote Sugar, Guinness, International Breweries, Flour Mills, Unilever amongst others.

Banking – N3.26 trillion

The banking sector with a total market capitalization of N3.26 trillion is the fourth most capitalized sector in the local equities market. Despite being the third largest sector in the beginning of the year, losses in the share prices of GT Holdings and Zenith Bank cut the sector’s valuation from N3.59 trillion as of December 2021.

It is worth adding that none of the companies in the banking sector is valued above N1 trillion. Meanwhile, Zenith Bank which is the most valuable bank in the sector is valued at N687.58 billion as of August 2022.

GT Holdings followed with a market capitalization of N584.2 billion, Stanbic IBTC (N401.7 billion), FBN (N400.2 billion). Others in the sector include Access Bank, UBA, Ecobank, Union Bank amongst others.

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