Nigeria vs UK Stock Market: The ten most popular stocks - and how the markets compare

-

 

UK stock Market vs Nigerian Stock Market

In the last one year, the naira has been somersaulting against major currencies of the world, especially the US dollar and pound sterling. Many Nigerians who have surplus cash look for ways to hedge their money against the downward spiralling value of the naira. Some keep their surplus cash in US dollars and other foreign currencies. Others invest in shares and stocks of capital markets around the world, such as the US and UK capital markets. But the question here is: Is it more profitable to invest in the UK capital markets than in the Nigerian capital market? How does the Nigerian market compare with the UK market?

Check out the amazing cloud hosting services offered by Truehost here!

The Nigerian Vs The UK Stock Market

The Nigerian Stock Market

The Nigerian capital market commenced in 1946 when the colonial government issued the first development stock. However, it matured with the establishment of the Lagos Stock Exchange in 1960. Over the years, the market has grown in leaps and bounds. Today (February 3, 2025), it has an All Share Index of 104,630. In terms of the ASI, the market experienced mixed fortunes. In February 2024, it reached an all-time high of 105,778.3. However, in the course of 2024, it dropped to 95,833.80—an all-time low for the year in August, coinciding with the economic problems that characterized much of the later part of last year in Nigeria. The ASI later rose steadily, and today, it stands at 104,630, signifying investors’ confidence in the market and economic growth. With this outlook and current economic stability, the market is expected to grow further.

Nigerian Stock Market All Share Index is now 104,630

As of January 1, 2025, 151 companies were listed on the Nigerian Stock Exchange (NGX). Of all these companies, only four are listed on the premium board of the exchange. These companies are Access Holdings Plc, FBN Holdings Plc, United Bank for Africa Plc, and Zenith Bank Plc. The premium board is reserved for an elite group of companies that meet the most stringent corporate governance and listing requirements of the exchange in terms of the highest standards of capitalization and liquidity.

The top 10 companies in the market as of January 31, 2025, based on average market price for the last 52 weeks, are:

  1. ARADEL HOLDINGS PLC
  2. TOTALENERGIES MARKETING NIGERIA PLC
  3. DANGOTE CEMENT PLC
  4. NESTLE NIGERIA PLC
  5. PRESCO PLC
  6. OKOMU OIL PALM PLC
  7. BUA FOODS PLC
  8. TRANSCORP POWER PLC
  9. GEREGU POWER PLC
  10. MTN NIGERIA COMMUNICATIONS PLC

These companies represent the major sectors of the Nigerian economy. In the list of the top 10 companies, we have oil and gas, telecommunications, power, food and confectionery, construction, and agriculture. It’s no surprise that the agricultural sector is well represented among the top businesses listed on the Nigerian Stock Exchange. Overall, the current performance of the market indicates the stability of the Nigerian economy—an economy that has recovered from the deregulation of fuel and the floating of the naira in 2023.

 

The UK Stock Market

The United Kingdom's stock exchange market is primarily represented by the London Stock Exchange (LSE). It stands as one of the world's most prestigious and historic financial institutions.

The London Stock Exchange (i.e., the UK stock market) traces its roots back to the 17th century. During this period, stockbrokers were often excluded from the Royal Exchange due to their perceived unruly behaviour. Consequently, they congregated in nearby coffee houses, which became informal hubs for trading activities. Notably, Jonathan’s Coffee House emerged as a central venue where brokers gathered to trade and share information.

The UK Stock Market's All-Share Index recorded a significant gain, marking its strongest annual performance since 2021. 

In 1698, John Castaing, a broker operating from Jonathan’s, began listing the prices of various commodities and exchange rates, marking one of the earliest instances of organized securities trading in London. As trading activities intensified, a formal stock exchange was established in Capel Court in 1801, becoming the London Stock Exchange.

Throughout the 19th and 20th centuries, the LSE expanded both in terms of listed companies and trading volumes. It became a central platform for companies seeking capital and for investors looking for opportunities. The exchange played a crucial role during the Industrial Revolution, facilitating the financing of burgeoning industries and infrastructure projects.

In 2024, the UK stock market demonstrated notable resilience amidst a backdrop of global economic uncertainty. The All-Share Index recorded a significant gain, marking its strongest annual performance since 2021. The FTSE 100, which includes the largest companies listed in London, rose by 5.7%, closing the year at 8,173 points.

As of early 2025, the positive momentum of the UK stock market has continued. On January 29, 2025, the FTSE 100 experienced a 0.3% rise, bolstered by gains in the technology and financial sectors. Technology stocks rebounded, driven by improved performance in chip stocks, while financial institutions such as HSBC and Barclays saw notable gains following the Bank of England’s decision to delay new banking regulations. However, it’s important to note that the midcap FTSE 250 experienced a slight decline of 0.1% on the same day, indicating mixed performances across different market segments.

The UK Stock Exchange boasts a diverse array of companies spanning various industries. As of early 2025, the top 10 companies by market capitalization are:

  1. HSBC Holdings plc
  2. BP plc
  3. GlaxoSmithKline plc
  4. Vodafone Group plc
  5. Rio Tinto plc
  6. Unilever plc
  7. British American Tobacco plc (BAT)
  8. Diageo plc
  9. AstraZeneca plc
  10. Barclays plc

Like the Nigerian Stock Exchange, the UK’s top 10 companies represent a mix of different sectors. However, the same cannot be said of the US stock market.

Conclusion: Where Should You as an Investor Put Their Money?

The Nigerian and UK stock markets present contrasting opportunities for investors. The Nigerian stock market, while experiencing fluctuations, has shown resilience and growth potential. Its diversity across key industries, increasing investor confidence, and a stabilizing economy make it an attractive option for long-term investors willing to navigate currency risks and emerging market volatility.

On the other hand, the UK stock market offers a more mature, stable, and globally integrated investment environment. It provides exposure to some of the world’s most well-established companies, with relatively lower risks compared to emerging markets like Nigeria. However, economic uncertainties, regulatory changes, and currency fluctuations in the UK market should also be considered.

For Nigerian investors, the key question is whether to hedge against naira depreciation by investing in foreign markets or to capitalize on local growth opportunities. While investing in the UK market can provide stability and currency protection, the Nigerian market offers potentially higher returns for those who can tolerate the risks associated with an emerging economy.

Ultimately, the best investment decision depends on an individual's risk tolerance, financial goals, and market outlook. A diversified portfolio that includes exposure to both local and international markets may be the best strategy to maximize returns while mitigating risks.

Top 10 Companies

Top 10 Nigerian and UK Companies

Rank Top 10 Nigerian Companies Top 10 UK Companies

 

 

 

Comments

Post a Comment

Popular posts from this blog

Commencement Rules: Subtle Changes Section 12 of the Finance Act 2019 Make in Section 29 of the Company Income Tax Act 1990

-
Image
  In Nigeria, taxation laws are crucial for businesses to understand and comply with. One of the key laws governing company income tax is the Company Income Tax Act (CITA) 1990. However, like any legal framework, CITA has undergone amendments to address changing economic realities and improve clarity. A significant update came with the Finance Act 2019, particularly in Section 12, which amends Section 29 of the CITA. Check out the amazing cloud hosting services offered by Truehost  here ! In this article, let’s highlight the subtle modifications section 12 of the Finance Act 2019 make in the CITA 1990, focusing on the computation of assessable profits for a company just commencing business or trade—commencement rules—in Nigeria. Assessable Profit of Companies Commencing Business: The Old Rules Originally, under the old rules, Section 29 of the CITA 1990 detailed how the profits for the first three years of a new trade or business in Nigeria should be assessed. The rules ...
Read more

Nigerian Withholding Tax (WHT) Explained: Key Rules on Base Amount, Timing Rules, and Exemptions

-
Image
  If you’re a business owner or an accountant in Nigeria, understanding Withholding Tax (WHT) is crucial for staying compliant with tax regulations. One of the most common questions is: On what base amount should the WHT rate be applied? Equally important is: When should you deduct WHT? And last but not least: Are there exe mpted transactions under the new WHT regulations? Get reliable & affordable domain name and web hosting in Nigeria! Click here for fast, secure cloud hosting 👉 TrueHost Let’s go right on to provide answers with practical examples to these germane questions. On What Base Amount Should WHT Rate Be Applied? You must deduct WHT from payments to suppliers, as mentioned in my earlier post— New Withholding Tax Regulations: Do All Businesses Need to Deduct? However, one of the most common questions about WHT is: On what base amount should the WHT rate be applied? This happens to be one of the questions often bedevilling young and inexperienced accountan...
Read more

Understanding Nigeria's Digital Services Tax (DST)

-
Image
  Digital services have made life easier for everyone, but they’ve also created new challenges for tax systems around the world. In Nigeria, the Digital Services Tax (DST) was brought into its tax landscape by the insertion of paragraph (c) into section 13 (2) of the CompanyIncome Tax (CITA) by section 4 of the Finance Act 2019 to ensure that companies making money from Nigerians through the internet contribute their fair share to the country’s revenue. Whether you’re a local or foreign business, understanding DST is crucial. Let’s take you through it in quick session.   Check out the amazing cloud hosting services offered by Truehost  here ! 1. What is DST? DST is a tax on income made from providing digital services to Nigerians. If a company is operating online and earning from Nigerian customers without a physical office in the country, they must pay DST. For example, Netflix, which streams movies to Nigerians, and Google, which runs ads for Nigerian businesses...
Read more