LAGOS, NIGERIA – November 2, 2023 – The Nigerian Exchange (NGX) experienced a slight downturn on thursday, November 2, 2023, despite robust trading volume, as investors took profits following a recent surge fueled by the newly enacted Nigerian insurance Industry Reform Act (NIIRA 2025). The All-Share Index closed at 145,754.91, a decrease of 815.80 points or 0.56 per cent from Wednesday’s closing of 146,570.71.
Total equity transactions reached 2.21 billion shares, valued at N32.4 billion, executed across 35,036 deals. This represents an increase from the 1.98 billion shares worth N27.3 billion traded across 35,291 deals in the previous session.
Despite the overall market decline, market breadth remained positive, with 42 stocks gaining value and 29 losing.champion Breweries led the gainers, increasing by 10 per cent to close at N14.40 per share. Union Dicon Salt also rose by 10 per cent, settling at N9.90 per share. Global Insurance saw a 10 per cent increase, finishing at N1.10, while Guinness Nigeria gained 9.99 per cent, closing at N155.75 per share. AXA Mansard also climbed 9.99 per cent to N14.64 per share.
Conversely, Abbey Mortgage Bank experienced the largest decline, falling by 9.87 per cent to close at N6.30. Custodian Investment Plc decreased by 8.48 per cent, finishing at N40.45 per share. Deap Capital Management shed 7.53 per cent, ending the day at N1.35, and The Initiates Plc dipped by 7.34 per cent to N12 per share. Nigerian Police Force Microfinance Bank lost 7.25 per cent, closing at N3.20 per share.
Trading Activity Leaders: Linkage Assurance led trading volume with 585.6 million shares worth N1.17 billion. Universal Insurance followed with 213.19 million shares valued at N234.5 million, and AIICO Insurance traded 178.5 million shares worth N618.1 million. Mutual Benefits Assurance transacted 137.84 million shares valued at N402.46 million, and Sterling Nigeria traded 115.27 million shares worth N927.4 million.
Context: The NIIRA 2025 and Insurance Sector Impact
The recent market activity is largely attributed to the passage of the NIIRA 2025, signed into law by President Bola Ahmed Tinubu on October 31, 2023. This landmark legislation aims to modernize and strengthen the Nigerian insurance industry,increasing regulatory oversight,raising capital requirements for insurers,and promoting innovation. The Act is expected to consolidate insurance laws, improve risk-based supervision, and enhance consumer protection.
According to David Adonri, Vice President of Highcap Securities, the initial surge in demand for insurance stocks following the NIIRA 2025 signing was a natural reaction to the perceived positive impact of the reforms. However, he noted that such momentum is often unsustainable. “Investors need to know that no rally in the market is sustained indefinitely. What happened today is absolutely normal,” adonri stated. He further explained that the market had previously been bullish due to the release of half-year results from various companies.
The NGX, located in Lagos, serves as the primary stock exchange in Nigeria, facilitating the buying and selling of securities and playing a crucial role in the nation’s economic development. The current market capitalization of the NGX is approximately ₦39.16 trillion as of November 2, 2023.
(NAN)
