Recapitalisation wave puts NGX on course for a record year
Stock exchanges make money when investors trade shares and companies raise capital. Nigeria has seen plenty of both this year, and Nigerian Exchange Group has been collecting the fees. The post Recapitalisation wave puts NGX on course for a record year appeared first on Nairametrics .
Nigeria's Nigerian Exchange Group (NGX) is on track for a record year following a wave of recapitalization among banks and lenders. Nine-month revenue surged 80% to N27.3 billion, while pre-tax profit increased 83% to N20.6 billion, already surpassing the full-year 2025 forecast. The surge in trading activity was driven by banks raising fresh capital, with notable offers from major lenders such as Fidelity, FCMB, and Wema attracting a new wave of investors.
The All-Share Index has gained around 60% this year, and market capitalization has surpassed N160 trillion, translating to substantial revenue for NGX. Transaction fees more than doubled to N20.7 billion, accounting for three-quarters of the exchange's revenue, while listing fees rose 25% to N3.7 billion. NGX also benefits from its 43.5% stake in the Depository Trust and Clearing Company of Nigeria (CSCS), contributing an additional N5.7 billion in profit from associates.
However, the third quarter paints a less optimistic picture, with revenue rising 36% but operating expenses climbing 63%. Staff costs doubled due to bonus accruals, while general expenses and travel costs also increased. Quarterly net profit fell 7%, and the cost-to-income ratio worsened from 46% to 59%. Despite strong listing fees, the quarter saw a 10% drop in listing fees despite a robust nine-month performance.
NGX remains exposed to market sentiment, as recurring revenue streams like market data and technology income are flat or shrinking, and treasury income fell despite the growth in the investment portfolio. The balance sheet remains robust with no debt, N61 billion in equity, and sufficient liquid bonds to support generous dividends. However, NGX's valuation of around 27 times annualized earnings suggests that its success hinges on a robust market.
The next catalyst for NGX's continued growth is the listing pipeline, particularly the NNPC listing and other significant IPOs. If these events materialize, NGX could sustain its momentum. Otherwise, investors may be paying a premium for an exceptional year that may prove challenging to replicate.
Written by urgent.news from Nairametrics's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
