Bearish Outing On NGX Continues, As Investors Bet On More Earnings Inflow

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This week, Nigeria equity market experienced another pullback and losses, with the Composite NGX All-Share index declining by 0.55%, driven owing to selloffs and profit taking in the face of bargain hunting ahead of more corporate earnings reports and economic numbers that point to the needed direction after pullbacks and correction.

All eyes are on the February Consumer Price Index to see if the figure will confirm the slowdown in inflation as seen in January’s 24.5% arising from the rebasing effect of the nation’s inflation basket variables. This was meant to accommodate the changing economic structure, even as Nigeria’s crude production suffered a decline also in February.

Looking ahead, we maintain that crude oil output level would be capped below 1.8 million barrels per day in 2025, with negative knock-on effects on national revenue projection. However, on the bright side, we expect the completion of key transactions, such as Shell’s asset sale to Renaissance Africa Energy Holdings, to enhance operational stability, efficiency, and provide a boost to crude production in the near term, if operating environment remain peaceful.

Market Outlook

We expect a mixed sentiments and extension of pullback on the NGX in the midst of relatively attractive fixed income market rates, as Nigerian Treasury Bills yields inched higher after last week auction, even as the stock market is still waiting for triggers in the form of positive corporate earnings reports, dividend announcements and the expected macroeconomic data. Below are weekly charts of market indexes and price action:

NGXASI Weekly Chart (Opening)

NGX Banking Index Weekly Chart