Nigerian stocks surge fuels commission revenue growth as top brokers raked in N24.102 billion

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 first 11 months of the year 2023 and is on track to end the year bullish.

The year-to-date (YTD) return of the NGX All-Share Index at the end of November stood at an impressive 39.25%.

This development has pushed the market to its 15-year high to outperform some emerging markets, resulting in leading 10` stockbroking firms in the Nigerian stock market earning a whopping N24.102 billion in the first eleven months of the year.

This represents a significant increase from the same period in 2022 when the top 10 brokers earned N19.779 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 131.349 billion shares, with a total value of N1.785 trillion, during the period under review.

This figure represents 54.95% of the total value recorded between January 1, 2023, and November 30, 2023, according to findings by Nairametrics.

131.349 billion shares accounted for 51.33% 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 N909.205 billion in value and representing 50.93% of the total value of transactions conducted in the period.

CardinalStone Securities secured the highest position in the ranking, with a transaction value of N415.083 billion, which accounts for 12.77% of the overall transaction value.

Stanbic IBTC Stockbroker followed closely with shares valued at N259.003 billion, representing 7.97% of the total transaction value. Additionally, Apt Securities & Funds recorded an estimated value of N235.119 billion in trades accounting for 7.24%.

Meristem Stockbrokers facilitated transactions worth N160.019 billion, while EFG Hermes transacted shares valued at N152.558 billion during the 11 months.

Others are United Capital, FBN Quest Securities, Cordros Securities, Apel Asset, and Morgan Capital which facilitated deals valued at N151.584 billion, N129.143 billion, N117.985 billion, N86.298 billion, and N78.546 billion respectively.

Brokers to earn a whopping N24.102 billion from commissions
A cursory analysis of the value traded indicates the top 10 brokers may have raked in about N24.102 billion in commissions collectively in the 11 months 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 21.86% over the commissions earned in the corresponding period of 2022 with a value of N1.465 trillion.

Market performance

Equities trading on the Nigerian Exchange Limited (NGX) ended November on an upbeat note, buoyed by a surge in investor confidence toward listed corporations.

Investors seemed to be placing substantial bets on the renewed hope agenda, although a portion of the gains can also be traced back to internal shareholder dynamics.

A notable highlight was the listing of 4 billion ordinary shares of Mecure Industries Limited, a pharmaceutical and nutraceutical manufacturing company, at N2.96 per share on the NGX growth board.

This addition pumped N11.84 billion into the Exchange’s market capitalization, injecting fresh liquidity into the Nigerian capital market and opening new avenues for wealth generation.

This wave of optimism was reflected in the buying patterns, driving the All-Share Index to conclude November at 71,365.25 index points. This marks a robust 3.08% increase from the previous month.

The year-to-date (YTD) return of the NGX All-Share Index now stands at an impressive 39.25%.

Despite ongoing concerns about escalating inflation, interest rate hikes, volatile exchange rates, and the potential impacts of the 2023 general elections, investor confidence has remained resilient. This has led to heightened buying activity in the market.

All-Share Index crosses 70,000 points for the first time
Equity trading on the Nigerian Exchange Limited (NGX) closed trading on Wednesday, November 1st, 2023, in the green territory as the NGX All-Share Index appreciated by 1.94% to cross 70,000 index points.

The development was unprecedented in the history of the Exchange being the first time the Exchange will achieve the feat.

The market positive sentiment among investors is being attributed to several factors, including favourable policies introduced by President Bola Tinubu’s administration such as the removal of fuel subsidies, streamlining of exchange rates, the floating of the naira and investors strategically positioned themselves and taking advantage of the recent record earnings posted by quoted firms.

Consequently, available statistics to the Nairametrics showed that the All-Share Index, which is the broad index that measures the performance of Nigerian stocks, opened the trading month at 69.236.19 index points at the beginning of trading on November 1, 2023, and closed at 71.365.25 points at the end the month on November 30, gaining 2,129 basis points or 3.08%.

Further analysis revealed that activities on the Nigerian Exchange Limited (NGX) which opened the trading month at N38.038 trillion in market capitalization at the beginning of trading, closed the month at N39.051 trillion, hence has earned a month-to-date gain of about N1.013 trillion.