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1. Nigerian Capital Market at Crossroads; Working Towards a New Normal

Proshare’s ‘Toni Index’ and ‘Gote Index’ 

This section aims to examine the performance of Proshare’s index which consists of the Dangote index and Tony’s index year-to-date. Tony and Dangote have stocks with large Market Caps which can the overall sentiment of the market. Tony’s index consists of AFRIPRUDE, TRANSCOHOT TRANSCORP, UBA, and UBCAP while Dangote’s index consists of DANGCEM, DANGSUGAR, and NASCON.

Dangote Index (Gote Index)

The index opened the year on a positive note with growth of +1.35% in January 2022 following major declines in March, May, and June with -0.31%, -4.85%, and -1.62% respectively. The month of May particularly recorded the highest decline during the year. The decline was a result of MPR rate hikes from 11.5% to 13.0% in May 2022. The Gote index closed the year at 136.21 index points, posting a Yield to Date of 0.99% (see chart 2 below).

Chart 2: 

Furthermore, Dangote Cement Plc is a large-cap stock within the index that served as the major factor contributing to the growth or decline of the Dangote Index. Dangote cement delivered slightly weak Q3 2022 financial result, posting a profit for the year of N12.41M which represents a decline of -23.5% recorded in Q3 2021. Profit before tax (PBT) in Q3 2022 stands at N335.9m which shows a -17.2% decline in Q3 2021 at N405.59m. The rise in revenue was because of increase in sales of cement and clinkers which saw a growth of 15.2% at N1.12bn in Q3 2022 as against N1.02b generated in 2021 (see chart 3 below).

Chart 3: DANGCEM, DANGSUGAR, NASCON SHARE PRICE MOVEMENT Jan – Dec 2022

Toni Index

The index started the year off on a positive note, rising by +7.92% to 118.03 index points in January 2022. This was followed by a 4.91% Month-on-Month (MOM) increase rise to 123.83 index points in February, followed closely by a significant MOM decline of -10.78% in March. Thus, the Toni index ended Q1 with a yield to date of +1.01% at 110.48 index points.

April kicked off Q2 2022 as it posted an improved MOM of +6.76%. However, the index could not maintain its positive posture as investors began to offload the Toni index stocks with major sell-offs in AFRIPRUDE, UBA, and UBCAP representing a MOM decline of -3.33%, -6.06%, and -3.35% respectively. The months of March, May, June, July, and September recorded a decline of -10.78%, -0.93%, -3.60%, -5.27%, and -2.48% M-o-M, respectively. The chart below reveals that the Tony index had reported a mixed market performance in the year 2022 with the Bulls dominating at the end of the year (see chart 4 below). 

Chart 4: Toni Index Yields Jan. 2022 - Dec. 2022

The months with the highest MoM yields were January, April, February, November, December, and August with +7.92%, +6.67%, 4.91%, +4.90, 3.41%, and +0.49% respectively. Investors’ activity on the Index is high, as it is mostly composed of stocks in the financial services sector (UBA, AFRIPRUD, UBCAP), the sector is also most active on the NGX. Yield to date returns on AFRIPRUD, TRANSCOHOT TRANSCORP, UBA, and UBCAP in 2022 are -5.51%, 16.17%, 17,71%, -5.59% and 41.41% respectively  with UBCAP posting the best yield to date return by the end of the year and sell offs were recorded in  AFRIPRUDE and UBA (see chart 5 below). 

Chart 5: