Kayode Tokede
A capital market expert, who is also the Managing Director Arthur Steven Asset Management Limited (ASAM), Mr. Olatunde Amolegbe, has projected 39 per cent stock market growth this year, stressing that the growth is underpinned by ongoing bank recapitalization efforts, new listings, and anticipated monetary policy easing by the Central Bank of Nigeria (CBN).
Amolegbe, in his presentation 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," held in Lagos, highlighted Nigeria's relative market attractiveness as a key factor in attracting increased foreign portfolio inflows (FPI), provided stable policies are maintained.
He noted that the bank recapitalization process is set to boost investor confidence, while high-profile listings such as Nigerian National Petroleum Company Limited and Dangote Refinery are expected to enhance market liquidity and broaden investment opportunities.
The projected bullish trend in 2025 comes as investors position themselves ahead of 2024 fiscal year results and dividend declarations, particularly in the banking sector.
However, Amolegbe cautioned that the market's performance will depend on critical factors such as the country's economic growth trajectory, monetary policy direction, and corporate earnings results.
The firm, however, anticipated 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 palm oil industry, robust growth is forecast for key players such as Okomu Oil Palm Company (OKOMUOIL) and Presco Plc. Sustained global demand for palm oil, coupled with rising prices and improved production volumes, are projected to drive growth in the sector, with expected returns ranging between 18 per cent and 25per cent.
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 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.