Investors respond positively to Tinubu's economic policy direction

The stock market experienced an appreciation of ₦1.51 trillion as investors responded favorably to Tinubu's plans to unify foreign exchange rates.

In addition, the naira strengthened against the dollar on the parallel market, closing at ₦765/$1, a gain of ₦5 compared to the previous day's rate of ₦770/$1.

The stock market witnessed substantial growth, with the market capitalisation opening at ₦28.845 trillion and closing at ₦30.350 trillion, representing a 5.23% increase. The NGX All-Share Index also rose by 5.23%, reaching 55,738.35 basis points, marking the largest single-day gain since November 12, 2020.

President Tinubu's emphasis on phasing out the petrol subsidy regime in his speech received support from industry experts and multilateral lenders like the International Monetary Fund (IMF).

They believe that such measures will attract foreign capital and enable the government to allocate funds to more productive sectors like infrastructure, education, and healthcare.

Sector performance boosts market growth and presents investment opportunities

In yesterday's trading, 64 stocks recorded gains, while 12 stocks experienced losses. Notably, Transcorp Hotels Plc, Jaiz Bank Plc, Nigerian Breweries, Eterna, Zenith Bank, FCMB Group, Sterling Bank, and Deapcap emerged as top gainers, with a 10% increase. Access Corporation, with an 8.33% gain, was the most actively traded stock.

The banking, industrial, consumer goods, and oil and gas sectors all witnessed positive performances, contributing to the overall market growth. The NGX Banking Index expanded by 8.20%, driven by gains in Sterling Bank, Zenith Bank, and Jaiz Bank.

The NGX Industrial Index rose by 7.41%, mainly due to positive sentiment surrounding Dangote Cement, Lafarge Africa, and Berger. The NGX Consumer Goods Index increased by 6.41%, with Nigerian Breweries, Dangote Sugar, and Nascon as key drivers. Finally, the NGX Oil and Gas Index saw a 4.04% rise, supported by the bullish trend observed in ETERNA, CONOIL, and Total.

Experts believe that this could be an opportune time for investors to consider quality investments with a medium to long-term horizon. They expect investor sentiment to be influenced by the pursuit of positive returns and developments in the interest rate space.

How other local industries and stake holders feel about Tinubu's economic direction

While President Tinubu's economic policy direction received praise from some quarters, the issue of phasing out the petrol subsidy regime has raised concerns among labor unions, including the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC).

President Tinubu, the Governor of the Central Bank of Nigeria (CBN), and the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, held talks to address the agitation against the subsidy regime's removal. The outcome of the discussions and the schedule for further talks remain uncertain.

The Major Oil Marketers Association of Nigeria (MOMAN), the Depot and Petroleum Marketers Association of Nigeria (DAPPMAN), and the Independent Petroleum Marketers Association of Nigeria (IPMAN) have endorsed President Tinubu's decision to phase out the petrol subsidy regime.

They view this move as a positive shift in the country's economic trajectory and emphasise that there is no need for panic buying or stockpiling of petrol. These organisations assure Nigerians of adequate fuel supply and pledge to manage distribution costs to minimise the impact on pump prices. They also call for continued dialogue with the government to ensure stability in the oil sector during the transitional period.