The Nigerian Stock Exchange (NGX) may be IPO-starved, but the bourse has remained relevant in helping businesses and governments raise money.
According to NGX filings, the stock market recorded ₦12.17 trillion ($7.85 billion) in trading volume for corporate listings and FGN bonds in 2024.
Corporate listings, including bonds and memorandum listings, led the charge with ₦6.2 trillion ($4 billion), surpassing the ₦5.95 trillion ($3.84 billion) generated from FGN bonds.
Companies such as Transcorp Power, which listed ₦1.8 trillion ($1.16 billion) worth of shares, and VFD Group, which raised ₦12.5 billion ($8 million), were among the notable contributors. These corporate listings show that more companies are turning to the capital market to raise money. On the other hand, FGN bonds attracted investment, with Pension Fund Administrators (PFAs) favouring them for their stability, despite inflation impacting returns in other sectors.
In 2024, the NGX saw three companies—Transcorp Power, Aradel, and Haldane McCall—listed by introduction. The last IPO on the NGX was VFD Group in 2023.
Despite the absence of a true IPO, the NGX had a remarkable run in 2024. Compared to the previous year, the bourse reached ₦3.968 trillion ($2.55 billion) in trading volume, effectively tripling that number last year. However, the high trading volume is thanks to tier-1 and tier-2 banks turning to the capital market to raise money following the Central Bank’s recapitalisation directive. The Debt Management Office (DMO) also actively listed bonds on the bourse.
While an IPO is generally seen as a sign that companies trust the market to raise capital and that investors are willing to buy shares, the large deal flows in the capital market also show growing investor confidence. Nigeria’s bourse, the fourth-largest in Africa, also acquired a 5% stake in the Ethiopia Stock Exchange (ESX) which launched on January 10.
The high deal flow and pan-African support to other bourses show the maturity of the NGX. And with Tizeti set to become the first startup to go public on the exchange, the IPO starvation will soon phase out.
