Stock exchanges generate profits when traders commerce shares and firms elevate capital.
Nigeria has seen loads of each this year, and Nigerian Exchange Group has been accumulating the charges.
Nine-month income rose 80% to N27.3 billion, whereas pre-tax revenue climbed 83% to N20.6 billion, already surpassing the full-year 2025 determine.
The catalyst was the central financial institution’s requirement for lenders to lift contemporary capital by March.
Banks responded by issuing trillions of naira in new shares. Offers from the largest lenders and banks reminiscent of Fidelity, FCMB and Wema drew retail traders into the market, many for the primary time. Those traders saved buying and selling after the affords closed. The All-Share Index has gained about 60% this year, whereas market capitalisation has climbed above N160 trillion.
The direct payoff was comparatively modest: itemizing charges rose 25% to N3.7 billion. The larger reward got here from transaction charges, which greater than doubled to N20.7 billion and accounted for three-quarters of income. Recapitalisation introduced traders in; the bull market saved them buying and selling.
NGX advantages from that exercise in one other method. It owns 43.5% of CSCS, the depository that clears trades on the trade. Its share of income from associates rose 70% to N5.7 billion, contributing greater than a quarter of pre-tax revenue. The disappearance of final year’s N700 million finance value supplied one other enhance.
The third quarter, nonetheless, affords a much less flattering image. Revenue rose 36%, however working bills climbed 63%. Staff prices doubled as bonus accruals caught up with the windfall, whereas normal bills, journey prices and donations additionally jumped. Quarterly web revenue fell 7%, and the cost-to-income ratio worsened from 46% to 59%.
Listing charges additionally fell 10% within the quarter, regardless of their sturdy nine-month efficiency. Bank recapitalisation is full, and insurers’ capital raises supply a a lot smaller follow-on alternative.
That leaves NGX extra uncovered to market sentiment than its record earnings may recommend. Market information and expertise earnings, the recurring income streams meant to cushion a downturn, are flat or shrinking. Treasury earnings additionally fell regardless of progress within the funding portfolio.
The steadiness sheet stays sound with no debt, N61 billion in fairness and sufficient liquid bonds to assist beneficiant dividends.
At final week’s share worth of about N165, nonetheless, the inventory trades at roughly 27 occasions annualised earnings. That valuation assumes continued progress from a enterprise whose fortunes rely closely on a buoyant market.
The subsequent catalyst is the itemizing pipeline. If the promised NNPC itemizing and different giant IPOs materialise, NGX may maintain its momentum. If they don’t, traders could also be paying a premium for an distinctive year that proves tough to repeat.
