The 10% rule: Is NGX helping or hurting investors?

Added: 2026-06-02

[00:00:09]It's the Niametric Capital Market Choice Award where we reward you as a capital market player for your excellence all throughout the year. We're having this on the 5th of June 2026, which is on Friday. But then it's strictly by invitation and if you're watching you can also be a part of it by um we're going to be live streaming the the entire award on Narametric television on YouTube. So you want to be a part of this and um this is market watch brought to you by Narametric Television. Let's start with some of the top stories around the market. GDP it grew by 3.89% the first quarter of 2026. What is really behind this growth? you're going to find out on this episode of Market Watch. And then we're also taking a look at the there's some limit um regarding um the market 10% daily limits, meaning that no stock can go above 10% or below 10% meaning um gains or losses. The regulators are really protecting the market with with all of this and our analysts are going to analyze all of this. And then um First Hold Co 253 billion naira capital raise. What shareholders and investors should know about First Hold Co. in the market. I've got the ever delectable. She's with us this time around. Okay. How are you doing? They've missed you a lot.

[00:01:37]>> Been well. I've been well. I've missed them too.

[00:01:41]>> Okay. Okay. Idi Mktar Muhammad, you're very much welcome.

[00:01:45]>> Thank you so much for having us. I'm not sure who G really missed us, but it's good to have her back. Maybe she she just said it that she missed her view.

[00:01:52]She didn't say she missed us, but it's fine. Let's go.

[00:01:54]>> Of course, I of course of course I did.

[00:01:56]>> 3.89%.

[00:01:58]First quarter GDP. What does this really mean for investors, household confidence, and the I I love to say people, >> the ordinary man on the street. What does it mean for them? Because these are just numbers, but in reality, how is this affecting Nigerians and the market in general? 3.89%.

[00:02:22]>> Is the economy growing? What do you think?

[00:02:26]>> That's a whole lot of questions.

[00:02:27]>> Yeah, >> the man with the numbers.

[00:02:31]>> Yeah, it's not a matter of the man with the numbers.

[00:02:34]>> Uh um Frank, thank you very much. The GDP yesterday grew by 3 um 89 in Q1 2026. Um uh one which is strong on on face value it is okay like really mentioned as it trickle down to >> uh the ordinary man um the masses well it might not be um like that but what we know because if you look at GDP you have to look at the company how do they calculate GDP >> of course you have uh you have the expenditure approach you have the production and output approach I think that is they use the production and approach that means look at the values from various sectors >> added. So you now arrive at that nominal GDP of about 110 trillion compared to 94 trillion in second quarter 2025. Well um for me let me just say my opinion for me I think um yes u on the front line headline report he has grown but I would like to look at what's what drove that uh growth >> especially using the production and output approach >> to arrive at that GDP uh where you have the value added by the various sectors and for me I think I will look at it um from the angle okay like is you have the agriculture, you have the cement, you have the financial and you have the ICTA contributing largely to to that growth.

[00:04:03]But my point is this um what actually drove that uh contribution is it as a result of uh price mechanism companies like the cement sector >> uh where you have u if you look at their production the production increase what really happened there but I think even if you let's use cement cement companies for example yes the there was uh such um great expansion there but I think um more driven by by prices than the uh the production. So I look at the same thing with uh even the financial and insurance uh sector that equally I think about 12 point something%.

[00:04:44]>> Then you look at what's um what's happened there and uh you see even their core operations um declined. So at times you see expansion where you have um non-interest income in terms of foreign exchange g and revaluation. So but for me I would have loved to see the contribution come from real value reproduction.

[00:05:09]>> But can you really say that the economy is growing because you mentioned expansion in certain sectors when the citizens are actually feeling poorer.

[00:05:18]They still complain about high cost of living, low purchasing power. So why is the growth?

[00:05:23]>> Well, okay, you have to look at it.

[00:05:25]There there are two different things there. Yes. Um ordinarily the growth will u trickle down to um the let let me just use the standard of living. Let me just use that one standard of living.

[00:05:38]But u uh the other things there there are factors apart from the GD GDP growth that that um affect standard of living.

[00:05:48]Yeah. And right now you know the cost of living is very very high and um where you have um that's why you have the inflation going up um I think from 15.38 to 15.69 of course you know the reason why the inflation went up um cost of um uh things like energy has the cost of energy has really gone up and which is which is a major thing a major inducer there. So uh of course if um I think gas a kg of gas now is going as as high as 1,500 naira uh uh PMS is going as as high as one some 1,290 some 1,300 at least those uh those uh uh those products at least impact on um on cost of uh cost of living which will eventually affect your standard of living. So it's quite different from GDP. That's what I if you have looked very well what I said that >> maybe when you look at the when you are using the production and output approach look at those sectors the value they have added >> which might not really reflect uh to reflect the the real situation we have we have now but man at least they have growth there.

[00:07:09]in the car waiting sector. Do you you still complain waiting by you always talk this wait >> I didn't talk >> you said but you the first thing you talk about this like sector that is driven by press go and buy it seems as though you clearly have a lot to say on this so and that brings me to my next question would you say that this 3.89% eight n% growth is strong enough for a country like Nigeria or how much percent would we need to see actual transformation >> see you see um you know when old men the old people that maybe people is in their 60 in their 50s that during um after our independence when they see we young people we are rejoicing over something they will be crying because they know where they are coming from >> so what we are rejoicing about 3.6 Since you've forgotten that during the time of good luck Jonathan throughout the 8 years is it 8? Yes 8 years of PDP we were enjoying growth of 7 something%.

[00:08:14]>> Wow.

[00:08:15]>> So we now begin to since the advent of APC our growth has not has been between 2 something% at a point we even do 1 something% during Bhari time. So we are celebrating 3 uh uh 89 >> 89 because we are looking at where we are coming from.

[00:08:33]>> There's nothing to celebrate. If you want to build a trillion dollar economy, your GDP growth mob is double digit for the next 10 years.

[00:08:41]>> Wow. So we are not going anywhere and like Indik has said if you look at that GDP the only way you can see GT GDP growth in the life of the Nigeria is if that growth is able to grow a sector that will provide job that will increase the earning ability of the citizen. So if you look at what he said, you look at the agricultural sector just 3 point something that means cannot even provide food for us than it to talk of growing I mean providing job.

[00:09:15]>> And if you look at today the CBN was talking about 6 billion spent on food importation. You can see why.

[00:09:24]So definitely you look at um um the oil and gas how much of if you look because we're talking if you look at the oil and gas sector which are our cash cow is only our cash cow but if you think about growth you can see that they are even struggling to grow.

[00:09:40]You look at um the the only sector that you could celebrate you look at the banking sector that did 8 something%. a banking insurance fantastic you look at the service sector is driven by telecom and this is larly driven because we have um the genz's the genera that have used that space to create job for themsel through social media influencers and that and that so you could say that also that is there's a little bit of positivity there but outside of that when you look at the GDP growth to my life and your life as it stands now is not impact acting positively in our in our lives because it's not creating earning ability and Nigeria don't forget Nigerian economy is a consumerdriven economy if we don't earn to consume our companies will definitely struggle and once they struggle they not able to expand once they are not able to expand they will not create job >> wow look at that link what's the biggest message for retail investors and what should investors watch next and that I also want you to to just chime in your thoughts. How do they capture the informal sector? But let's talk about the the investors um first.

[00:10:54]>> Look, I I >> how should they approach this?

[00:10:57]>> And like if you look at that report again, you realize that um I think it's written by the man with the numbers in the pro himself. If you look realize in that report also he tried to see he tried to say it the way it is that they've never really been a correlation between GDP growth and the capital market.

[00:11:19]>> Wow.

[00:11:19]>> They've never really been that correlation.

[00:11:21]>> That's bold. Why? Why? Why do you think so?

[00:11:23]>> Because that's what we keep saying sometime there's not been really correlation between it because he even sound a thing of warning towards the end of that report. He said the growth does not signify positivity in the capital market.

[00:11:38]So the fact that a sector have expand because again let me look at it. Who are the biggest player in the oil and gas sector? Are they really listed in the exchange?

[00:11:51]Who are the biggest player in the agricultural sector?

[00:11:55]>> What would you say about separate?

[00:11:57]>> Sepad is one but again is really the biggest >> H. So but I'm just trying to remember this outside the bank that have their big players listed in the exchange how many of these sector then the telecom we have only MTN so when you look at that there's no correlation that's why sometime the barometer of any economy should be the capital market >> but in our own case with our capital market the way our capital market have grown and you want to ordinarily you should see our economic expansion but you are not seeing those connection But is is that even normal? The fact that the stock market has grown much faster than our GDP.

[00:12:37]>> I I like saying something like I like I will use this analogy. I like using this analogy. You see the stock market can take a life >> of its own. It's like um a a a a pregnant woman.

[00:12:54]When when you are pregnant, the child feeds from you.

[00:12:58]>> Mhm.

[00:12:59]it grow. What you eat is what the child will feed. But when the child comes out for the child to grow, the child will definitely feed from maybe things happening around you.

[00:13:10]>> Yeah.

[00:13:10]>> So you not be able you have to provide that food. So what happen in the capital market is the the companies that are listed sometime they feed from their profit from the economics that may not be in t with because of of your production. Let me give an insight.

[00:13:27]There are some product that you know we must consume every day. So we help your capital growth your profit but to sustain the life of that company there will come a point that the economy itself must be what will sustain your growth. So if you are feeding and the people and the economy maybe people were able to buy continue to buy only one in volume and the economy is not growing instead of to buy two they buy one but you have output the economy is not growing then at a point because the economy is growing a lot of people are not able to buy again.

[00:13:58]>> Yeah.

[00:14:00]>> So then that mean the economy is not growing so people don't have any ability to buy more. So definitely it will affect you >> in the long run in terms of your price.

[00:14:09]The only way you can now grow that price in dig complain about the cement sector.

[00:14:13]You now increase your price.

[00:14:15]>> Yeah, true.

[00:14:16]>> So that's the way I see it. So that is why there's no doub because we have seen that the the company that listed have a life of their own. But to sustain themsel to grow to the potential that they need they need the life of the economy. They cannot continue to grow like that. It's like sometime again in road construction sometime you are passing a good road but when you go to the inter road they are very bad so your car will suffer it doesn't mean because so I I I I just think that um we have not gotten to that point yet so sometimes we have not gotten to that point yet on and I feel now we might get to that point because a lot of companies are now beginning to look at being listed in the in the exchange and then we can by time you get one of the key driver of the Nigerian economy being listed that is Dangut refinary IPO maybe by then you can now begin to look at >> how much the relationship but for now >> it's not it's not adding up maybe the prof to to add to that is correct but um you know the the the stock market is measured by market cap you understand so if you look at the market cap year there that's total market cap and look at the share price here to there you see that they are not the same thing um the market cap like the banking sector at least has gone up by over 103% um and you know the reason >> if you if you look at the share price year today again and look at the market cap market cap you you get that by multiplying the share price by shares are standing so you can see because of um uh let's uh this raising of new new capital that has increased the shares are standard so definitely the market cap will will increase.

[00:16:11]>> Yeah.

[00:16:12]>> Uhhuh. So you have you have increased total market capital not necessarily because the the share prices have moved at that rate but because there are uh increases in share capital.

[00:16:25]>> Very true. So but my my take on having said that my take on this is that yes the the stock market has rallied faster than the the GDP. So that shouldn't that shouldn't deceive investors. So there are there are key things you have to look out for. You have to watch what is the earning. I always think that make sure the the stock market has really around it 61%.

[00:16:51]>> Yeah.

[00:16:51]>> As of May >> which has surpassed what happened last year last year. But you should you should not you should not just hold on you should not focus on that investors should not focus on that go and look at the quality >> uh earnings ring more than or moving uh the same part with that share price increase if you don't check that um that means we are just uh we are just momentum just you just >> you're just trying to change your language from your language You are just playing. So these are the kickings. Look at the earnings. Look at dividendability >> look at liquidity. So those ones are very very king.

[00:17:33]>> So the regulators are here again.

[00:17:36]>> The regulators are here again. 10% cap and flaw. Um so so for those who are watching they are saying that a stock cannot go beyond 10%. Let's say gains of the day or below losses of the day cannot go below um beyond 10%. I I would love to hear from you what's how how does it work? Let's let's talk about this was price limit. Why was it why was it introduced? Every market have what they use to protect their market from um from uh either from um >> manipulation and also from also excessive losses. You know there were like the US market they started those um what they call cycle breaker after the first stock market crash where a lot of people people lost their life committed suicide.

[00:18:35]>> So they have to bring that cycle break out that so once the market fall down at this percentage we what we call a cycle breakout we shut down the market then we could open it and if it continue like that the market closed for that day. I think there was something similar that even happened with GameStop >> when when they >> so they they that was a way of guiding the market like in the Nigerian contest before now it was 5% up or down. So then it was now moved to 10%. We also had our own time during the 2006.

[00:19:11]We had what we call our own cycle breaker where the market lost so much and the the the market was short for a period and then reopen again. Sometime open to calm down >> so that everybody will calm down and look at the numbers before but now 10% gain was introduced 10% up 10% down.

[00:19:33]>> Yeah. My my I don't have a challenge with 10% up 10% down because again >> it's your it's what you put in there as a cap. Yeah. You can't put if you put 100% stock can gain 100% in a day. It can it could help manipulate to move their stock. And again the challenge I have again is before now when we have the 5% up and 5% down 10,000 unit could move a stock up or move it down.

[00:20:05]>> Yeah. Okay. I get But when we had this 10% we moved it to 100,000 unit can change the the price dynamic of a stock for me I think the should look at that number again it create room you remember this issue they had with is it which of the stock that was suspended >> is it zes >> because it open especially when you have even if they make 10% up I mean 10% up 10% down it's fine But they should also look at companies that come in by introduction should not enjoy that because what happen is that is held by those that introduce those company. So they just moving it by 100 100,000 unit within themsel >> they can move it within themselves. So what it means is that if I decide to cross my stock 100,000 unit to indika, indika decide to cross to o decide to cross to you, we we could do that to move the price and technically is not manipulation.

[00:21:11]So we need to look at that um critically as and integity in the market. If you don't have liquidity in the market 100% movement and that is easy >> but we have the free float um um rule >> explain before you come on board um I would just love us to clarify I think there's a new um policy that is starting today regarding T+1 >> that's l if you if you withdraw if you place withdrawal today you can with your money comes in today what's your take about that I don't know whether your I don't know whether your money will come out today because again no no why I say that I don't know whether your money will come out today is if I sell today and market is closing by 4:00 >> they've extended the time yeah >> yeah 4:00 bank have closed before that time so will bank have closed at that time bank has closed by that time so but um state will be able to glue Look look look let's um let's salute the courage of the exchange the regulators were coming for that I think we're now that's what is happening that's the best global best practice you sell today you get your >> money today >> money today I think they need to go a bit further >> and make sure that um those the rules are the um the brokage for employment >> they implement it what it means is that what it means is that um that mean what we have is brokerage firm must be connected I mean digitally we they should begin to eliminate a situation where we have to wait to collect check that's what causes those delays because again if I'm going to sign check my some one or two people are not around you have to wait for them so I think the should go a little bit further and but for me um plus one is a good venture but um implementation the regulators need to be on top of their game to get those implementation or like I said and I'll repeat it whether agree with me or not the market closed by four so when will be >> but the thing sorry before you go that m the thing you have to establish is this if a broker is intentional and wants to hold your money you understand it will be very difficult for the regulators to address that >> difficult >> yes yeah because this is more or less like an intentional act if if you whether it is plus one or plus three because I have cases these experiences where okay after delay wait I I don't have to report to anybody will I start to v my not I'll start reporting so my my point is this my point is this my my point is this >> key to the capital market operators not even the regulators we've always had this had this rules >> wow >> it is the sincerity of purpose that is the major thing if you say plus one the broker should be able to stick to it not being intentional because you can book book your intention. You have your money. Your money has left the NGS and it's now in your trading account but you cannot access it.

[00:24:29]>> Okay.

[00:24:30]>> So we we are running out of time to our final story. Right. First told call wants to raise 253 billion naira. Why does it need so much money?

[00:24:43]>> Is it a sign of strength or weakness?

[00:24:45]It's not capital base is not a sign of strength at all. is yes that is a sign of strength sincerely speaking it's it's how you are able to deploy it to to to um to to um create profits that is the strength because you can have um a large capital base you have a capital base and you have a 1 trillion if you are not deploying it into sector that will generate more revenue um definitely um it doesn't it doesn't make any sense so we shouldn't think that because a banker is highly capitalized mean he's going to be the most profitable bank.

[00:25:21]>> No, I I I agree with you. Let me come in there. I agree with you.

[00:25:25]>> You don't agree now. I agree to you from one side. Allow me to You're not saying that um having a large capital base is not a guarantee that you but at least have the large capital base now >> so that you can so that you can you cannot be investing more in securities.

[00:25:44]If capital look at their numbers, complain, look at the numbers. Look at the numbers.

[00:25:52]my government you now complain that they have so much liquidity. So my point is capital base doesn't mean does not result to profit. We started with 25 billion. Some banks went under at that time.

[00:26:05]Professor Soludo said he said publicly no Nigerian bank will go down. When we had capital base of 25 billion we know some of them that did that and today they are not in existence. So last capital base is not a yes stick but again it could be a defining factor if those money are deployed and another question they could be deployed and yet you deploy to the wrong people and your non-performing loan will increase >> but we've seen a lot of shake up in the company what's your take we're about going now how is the valuation is it a buy or not >> um u um first bank uh first co is trading at uh $17 17 naira.

[00:26:45]>> Yeah.

[00:26:46]>> And um that will give you price to any ratio about 13 >> investors are paying 13 for every 12 earning per share.

[00:26:57]>> Well, that is reasonable. But um if you look at to the factor in the growth that will give you price to earning growth ratio of about 0.9 there about which indicate that yes reasonability is undervalued >> when you oh undervalued >> undervalued but uh for me yes I might be pricing in because um in 2025 uh due to impairment of about 826 billion >> that really affected their profit >> greatly. Now coming into Q1 I think even the profit they made in Q1 is more than what they did in full year 2025.

[00:27:38]>> Wow.

[00:27:38]>> So there is a shift recovery. So for me it is a buy for me.

[00:27:44]>> It's a buy for you.

[00:27:45]>> Yes.

[00:27:46]>> What do you see?

[00:27:48]>> What about going now?

[00:27:50]>> It's not a buy for me yet.

[00:27:51]>> Wow.

[00:27:52]>> And I'd also like you to chip in how it impacts you know the average Niger. So why it's not going to be a buy for me yet is that they are going to raise capital and I'm not sure that the previous capital race those shares have been added to their share standing and stand to be corrected. So >> okay let me let me come in here to correct um as at um >> Q1 2026 >> uh which is the share price and share premium is about 90% short of uh uh 500 19 billion short of that 500 billion required >> for them but I know maybe before that I think there in March they raised about 45 billion so that's why they said in the AGM that have uh they have actually met the 500 billion >> billion Okayization listed those stress.

[00:28:40]>> That's what I'm saying now.

[00:28:43]>> Not but leave me. Leave me. So I'm just giving you the data and work a buy and a pending decision.

[00:28:52]You said not a buy now decision by the decision is not founded.

[00:28:56]>> Very political. Not founded.

[00:28:58]>> Okay. So we're GOING TO HAVE FACT. I'VE GIVEN YOU THE FACT >> BUT BY THAT fact I I will say something else you know. So, so on the 5th of June, the Name Metrics Capital Market Choice Award, we have two categories that you can even partake in um we have the journal capital market journalist of the year and then we have the capital market influencer of the year. So, you could go to awards.nametrics.com/vote.

[00:29:25]You're going to see it on the screen and then you can also check the um description. You're going to see the link. So, you could click there and vote. who is your capital market journalist of the year and also who is your capital market influencer of the year. On the 5th of June, you're going to get the result and you're going to know those who we would reward with um great work they've been doing in the capital market.

[00:29:48]>> You can also be a part of the experience by logging on or clicking to uh Nametrics TV on YouTube to enjoy the whole event.

[00:29:58]>> Yeah. And that's it on this episode of Market Watch. See you on the next one.

[00:30:01]We do this every Mondays, Wednesdays where we have conversations around the market.