Market capitalisation (market cap) is the total market value of a company's shares. This article explains what it means, how to calculate it, and why Nigerian investors reference it.
Ready to start investing in Nigerian stocks? Shares Saver registers your shares directly in your own name through SEC-regulated brokers.
Market capitalisation — or market cap — is the total market value of all a company's outstanding shares. It is calculated simply: current share price multiplied by total number of shares in issue. For example, a company with 5 billion shares in issue trading at ₦80 per share has a market cap of ₦400 billion. Market cap changes continuously as the share price moves, even if no new shares are issued.
Market Cap = Current Share Price × Total Shares in Issue. The total shares in issue for any NGX-listed company is available in its annual report, on the NGX disclosure portal, or on financial data services. The current share price is published on the NGX during trading hours. Both pieces of data are publicly available.
Ready to start investing in Nigerian stocks? Shares Saver registers your shares directly in your own name through SEC-regulated brokers.
Companies on the NGX are informally grouped by size. Large-cap companies — those with the highest market caps — include major banks, telecoms companies, and FMCG companies. The NGX 30 Index specifically tracks the 30 largest and most liquid stocks. Mid-cap and small-cap are relative terms — there is no official Naira threshold set by the NGX, but analysts use these categories to compare companies of similar sizes.
Market cap is used to: (1) Determine index weighting — larger companies carry more weight in market-cap weighted indices like the ASI. (2) Compare companies of similar size — comparing a ₦500bn company to a ₦20bn company involves very different risk and liquidity profiles. (3) Screen investments — some investors look only at large-caps for liquidity; others look at smaller-caps for potential growth. (4) Calculate valuation ratios — market cap divided by annual earnings gives the P/E ratio, the most common valuation metric.
A common mistake is equating a higher share price with a more valuable company. This is incorrect. Company A trades at ₦500 per share with 500 million shares in issue: market cap = ₦250bn. Company B trades at ₦50 per share with 8 billion shares in issue: market cap = ₦400bn. Company B is more valuable in total despite having a lower share price. Always use market cap — not share price — to compare company sizes.
Current market cap data for all NGX-listed companies is published on the NGX website (ngxgroup.com), through stockbroker trading platforms, and through financial data providers covering Nigerian equities. Market cap figures are also included in company annual reports and quarterly financial releases.
Yes. Market cap changes whenever the share price changes — which happens continuously during trading hours. The share price movement alone (with no change in shares outstanding) is enough to change market cap.
No. Market cap is a size measure, not a quality or value measure. A company with a large market cap can be overvalued; a small-cap company can be undervalued. Investment analysis requires more than market cap alone.
Market cap rankings change over time as share prices move. For the current ranking, check the NGX website or a financial data provider covering Nigerian equities. Rankings should not be interpreted as investment recommendations.
Important disclaimer
This article is for general information and educational purposes only. It does not constitute financial advice, investment advice, or any recommendation to buy, sell, or hold any security. The value of investments can fall as well as rise. You should seek independent regulated financial advice before making any investment decision. Shares Saver does not provide financial advice.
Create a free Shares Saver account and start buying Nigerian stocks directly in your name.