Market capitalisation is the simplest measure of a company's total value as priced by the stock market. It tells you what it would theoretically cost to buy every share in the company at the current price. Understanding market cap helps you compare companies, assess a stock's importance to the NGX index, and understand the liquidity you can expect when buying or selling.
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Definition
Market capitalisation (market cap) is the total market value of a company's outstanding shares at a given point in time. It is calculated by multiplying the current share price by the total number of shares in issue.
Market cap = Share Price × Total Shares Outstanding. For example, if a company has 5 billion shares in issue and the current share price is ₦20, its market cap is ₦100 billion. Market cap changes every time the share price moves — it is not a fixed or audited figure.
Companies are often grouped by market cap size. On the NGX, large-cap companies are the biggest and most heavily traded — banks like Zenith, GTCo, and FBN Holdings; companies like MTN Nigeria and Dangote Cement. Mid-cap companies are smaller but still well-established. Small-cap companies have lower market values, are generally less liquid, and may have wider bid-offer spreads. There is no universal threshold separating these groups — they are relative classifications.
The NGX All Share Index tracks all domestic listed equities. Other NGX indices — such as the NGX 30, NGX Banking Index, and NGX Industrial Index — track subsets of companies, typically filtered by market cap, liquidity, and sector. Companies with high market caps and trading volumes tend to have a larger weighting in these indices.
Market cap measures only the equity value of a company — what shareholders collectively own at market prices. Enterprise value adds net debt to market cap to give the total value of the business including its obligations to debt holders. Enterprise value is a more complete measure when comparing companies with different debt levels.
A high market cap does not mean a company is well-run, profitable, or a good investment. It reflects what the market currently prices the equity at — which may be well above or below what a fundamental analysis would suggest. Market cap is a useful sizing tool, not a quality indicator.
The total market capitalisation of all companies listed on the NGX (domestic equities) changes daily with share prices. Check the NGX official website or the FMDQ/NGX data services for current aggregate market cap figures.
No. Large-cap stocks tend to be more liquid and better-covered by analysts, but size does not determine investment quality or future returns. Some small-cap stocks have outperformed large-cap stocks over time, and vice versa. Evaluation requires looking beyond market cap to earnings, cash flow, governance, and valuation.
A rights issue that raises new cash increases the total shares outstanding and, all else equal, increases market cap by approximately the amount of cash raised. A bonus issue increases shares outstanding but does not raise new cash — market cap remains approximately the same because the price per share adjusts downward proportionally.
Free float market cap counts only the shares that are available for public trading — excluding shares held by promoters, government entities, and strategic locked-in investors. A company may have a high total market cap but a low free float, meaning relatively few shares are actually available to buy and sell in the market.
Market cap is typically displayed on the NGX official website and on regulated data services. It changes daily with the share price. For the most current figure, use the NGX's own data portal or a licensed data provider.
Important disclaimer
This page is for general information and educational purposes only. It does not constitute financial advice, investment advice, legal advice, or tax advice. The value of investments can fall as well as rise. Seek independent regulated financial advice before making any investment decision. Shares Saver does not provide financial advice.
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