Speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2024 market review and 2025 forecast event, themed “In-Depth Evaluation of the Capital Market in 2024 and Prognosis for 2025,” Olatunde Amolegbe, Managing Director of ASAM and former President of the Chartered Institute of Stockbrokers (CIS), provided insights into the factors driving this optimistic outlook. The event, held on Thursday in Lagos, served as a platform to analyze market performance and future opportunities.
Amolegbe identified Nigeria’s relative market attractiveness as a magnet for foreign portfolio inflows (FPI), contingent on the stability of government policies. He emphasized that bank recapitalization efforts would play a critical role in bolstering investor confidence, while anticipated high-profile listings, such as Dangote Refinery, are expected to enhance market liquidity and expand investment options.
Key Drivers of Growth
ASAM predicts a bullish trend as investors gear up for 2024 fiscal year results and dividend declarations, particularly in the banking sector. However, the success of this projection hinges on several factors, including Nigeria’s economic growth, corporate earnings performance, and monetary policy direction.
A shift toward equities is anticipated as fixed-income yields decline, with the CBN likely to adopt a more accommodative monetary stance. Despite ongoing concerns over exchange rate volatility and inflation, conservative sectors like banking, consumer goods, and industrials are expected to deliver stable returns.
Sectoral Highlights
- Palm Oil Industry:
Key players such as Okomu Oil Palm Company (OKOMUOIL) and Presco Plc are forecast to achieve robust growth in 2025. With rising global demand for palm oil, improved production volumes, and increasing prices, the sector is expected to deliver returns of 18%-25%. Presco’s recent bond issuance to finance its acquisition of Ghana Oil Palm Development Company Limited underscores its growth strategy and potential. - Consumer Goods Sector:
Following a challenging 2024 marked by inflationary pressures, the consumer goods sector is poised for a rebound. Lower inflation, a more stable foreign exchange environment, and favorable government policies are expected to drive recovery. Proposed amendments in the Economic Stabilization Bill and access to trade credit facilities will likely create a supportive business climate. Furthermore, the CBN’s efforts to close the gap between official and parallel exchange rates are expected to ease foreign exchange access for companies in this sector.
Market Outlook for 2025
ASAM’s outlook for 2025 reflects optimism, underpinned by strategic reforms, improved investor confidence, and an evolving regulatory landscape. While challenges such as exchange rate instability and inflation remain, the market is set to benefit from the resilience and growth of key sectors. As Nigeria’s capital market aligns with global trends and local initiatives, the stage is set for another year of substantial returns for investors.
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