Afrinvest (West Africa) Limited, an investment management holding company, has highlighted six companies that may be listed on the Nigerian Exchange Group (NGX) in 2024.
In its latest outlook report titled ‘Pulling Back from the Precipice’, the company said NNPC limited, Veritasi Homes, Nigeria Reinsurance, Nigeria Machine Company, Haldane McCall, and Eleme Petrochemicals are possible listings on the NGX.
“The debut listing of VFD Group Plc and Mecure Industries Plc on the Nigerian equities market resulted in an inflow of N86.5 billion as of December 15, 2023,” the report said.
It said the entrants have contributed to the deepening of the market, and the NGX would anticipate additional listings to further enhance market depth,” the report said.
The report also revealed that the top 10 performing stocks in 2023 are Transcorp Hotels at 1,022.9 percent, Chams with 795.5 percent, CWG at 721.8 percent and Transcorp at 666.4 percent.
Others are MRS Oil (644.7 percent), Northern Nigeria Flour Mills (639.8 percent), Japual Gold and Ventures (507.1 percent), Ikeja Hotel (471.4 percent), FTN Cocoa processors (410.3 percent), Skyway Aviation Handling Company (407.0 percent).
The equities market closed last year with a capitalisation of N40.9 trillion and NGX All Share Index at 74,773.7 points. The market finished 2023 with returns of 45.9 percent.
“The equity market has benefited from recent government reforms, but challenges like inflation and fuel price rigidity persist,” analysts at Vetiva Research said in their latest outlook report.
They added that the market’s future trajectory will depend on how these issues are addressed and the government’s commitment to reform implementation, making it a landscape to watch closely in 2024.
“The market outlook remains mixed, with the potential for a currency devaluation by the Central Bank of Nigeria to combat currency pressures not entirely ruled out.
“Simultaneously, the CBN’s increase in stop rates at its primary auction reflects a cautious approach to monetary policy. Investors will closely monitor the pace and sustainability of these reforms and the
government’s dedication to their effective implementation,” they added.
On the outlook on consumer goods, Afrinvest noted that they are less bullish on the sector due to the expectation of continued cost pressure on raw material items due to lingering inflationary and FX illiquidity.
“We are mildly bullish on the sector as players are expected to drive higher mobile penetration, However, weak purchasing power could negatively impact our outlook,” it said for the telecoms sector.
For the banking sector, the firm said it is cautiously optimistic and it is hinged on expected normalisation in banks earnings (post positive FX revaluation gain in 2023).
“However, favourable regulatory action and recapitalisation drive could spur surprises.”
It added that it is mildly bullish on the industrial goods sector given the initiatives on cost reduction, aggressive market expansion, and capacity optimisation by players.
“We rate our coverage companies (Okomu oil and Presco) with ‘HOLDs’ amid the negative impacts of land borders reopening on local players, and ongoing FX reforms.”
