Despite the likelihood that the Nigerian Exchange’s All-Share Index (NGXASI) could close negative in January 2025, except something happens in the final week of the month, Olatunde Amolegbe, Managing Director of investment banking group- Arthur Steven Asset Management Limited (ASAM), on Thursday projected that bourse could still return as much as 39% this year.
The index closed 34.5% up at the end of 2024.
Amolegbe, a past President of the Chartered Institute of Stockbrokers (CIS), underpinned his forecast on the back of the ongoing bank recapitalization, listing of new equities, the country’s economic growth trajectory, and the possibility of monetary policy easing by the Central Bank of Nigeria (CBN).
Speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2024 market review and 2025 projection tagged “In-Depth Evaluation of the capital market in 2024 and prognosis for 2025” in Lagos, he highlighted Nigeria’s relative market attractiveness as a key factor that would attract increased foreign portfolio inflows (FPI).
This, he said, is however, predicated on the maintenance of stable policies, noting that the bank recapitalization programme could boost investor confidence, while high-profile listings such as the Dangote Petroleum Refinery are expected to further enhance market liquidity and broaden investment opportunities.
The projected bullish trend in 2025, he believes, comes as investors position themselves ahead of 2024 fiscal year results and dividend declarations, particularly in the banking sector.
Also, the ASAM boss anticipates a shift toward equities as fixed-income yields decline, driven by the CBN’s likely adoption of a more accommodative monetary stance. Despite lingering concerns over exchange rate volatility and inflation, conservative sectors such as banking, consumer goods, and industrials are expected to perform well, offering steady returns for investors.
In the Oil Palm industry, robust growth is forecast for key operators such as Okomu Oil Palm (OKOMUOIL) and Presco Plc, just as sustained global demand for palm oil, coupled with rising prices and improved production volumes, are forecast to drive growth. Both stocks are expected returns between 18% and 25%, just as Presco’s recent bond issuance to fund its acquisition of Ghana Oil Palm Development Company Limited is seen as a strategic move that further solidifies its growth prospects.
The consumer goods sector, he explained, is also set for a rebound, recovering from the inflationary challenges of 2024. ASAM’s positive outlook for the sector is based on expectations of lower inflation, a more stable foreign exchange environment, and supportive government policies.
The proposed tax modifications in the Economic Stabilization Bill, along with access to trade credit facilities, he added, could foster a favourable business climate, even as the ongoing efforts by the CBN to narrow the gap between official and parallel exchange rates are likely to improve access to foreign exchange, benefiting companies in the consumer goods sector.
Overall, Amolegbe said the 2025 outlook for the Nigerian stock market remains optimistic, bolstered by strategic reforms, policy adjustments, and improving investor confidence. While challenges such as exchange rate instability and inflation persist, key sectors are positioned to drive market performance and deliver strong returns for investors.
