Top Nigerian stockbroking firms earn N21.734 billion from commissions in 10 months

The leading 10` stockbroking firms in the Nigerian stock market raked in a whopping N21.734 billion in the first ten months of the year.

This represents a significant increase from the same period in 2022 when the top 10 brokers earned N18.955 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 122.254 billion shares, with a total value of N1.609 trillion, during the period under review.

This figure represents 54.61% of the total value recorded between January 1, 2023, and October 31, 2023, according to findings by Nairametrics.

The 122.254 billion shares accounted for 52.13% 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 N821.769 billion in value and representing 51.07% 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 N386.597 billion, which accounts for 13.11% of the overall transaction value.

Apt Securities & Funds followed closely with shares valued at N222.167 billion, representing 7.54% of the total transaction value. Additionally, Stanbic IBTC Stockbroker recorded an estimated value of N213.005 billion in trades accounting for 7.23%.

Meristem Stockbrokers facilitated transactions worth N154.109 billion, while United Capital transacted shares valued at N141.786 billion during the third quarter of the year.

Others are EFG Hermes, FBN Quest Securities, Cordros Securities, Morgan Capital, and Apel Asset, which facilitated deals valued at N120.677 billion, N119.180 billion, N111.451billion, N70.883 billion, and N70.091 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 N21.734 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 14.66% over the commissions earned in the corresponding period of 2022 with a value of N1.404 trillion.

Market performance

Equities trading on the Nigerian Exchange Limited (NGX) closed the month of October on a positive note as investors’ confidence was bolstered toward listed corporates following favourable policies and earning season.

Additionally, the listing of 190 million units of shares of the Group at N244.88 per share which added N46.527 billion to the market capitalization of NGX, further boosted liquidity in the Nigerian capital market and provided opportunities for wealth creation.

The NGX All-Share Index appreciated by 4.3% to close the month of October at 69,236.19 index points, recording a YTD return of 35.09% growth.

Despite concerns such as rising inflation, interest rate hikes, elevated exchange rates, and apprehension surrounding the fallout of the 2023 general elections, investor confidence remained strong, leading to increased buying activity.

The positive sentiment among investors can be attributed to several factors, including favourable policies introduced by President Bola Tinubu’s new 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.

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 66.382.14 index points at the beginning of trading on October 3, 2023, and closed at 69,236.19 points at the end the month on October 31, gaining 2,854.05 basis points or 4.3%.

Further analysis revealed that activities on the Nigerian Exchange Limited (NGX) which opened the trading year at N36.331 trillion in market capitalization at the beginning of trading, closed the month at N38.038 trillion, hence has earned a month-to-date gain of about N1.707 trillion.