NGX-ASI projected to grow as high as 40.4% in 2025

The NGX All-Share Index (ASI) is projected to grow by 40.4 percent in 2025, according to research analysts in Cardinalstone. This was contained in Cardinalstone’s 2025 Economic Outlook titled “Pressure to Plateau”.

Though, Afrinvest West Africa, in its FY 2025 Outlook Report, projected a 24.3 percent return for the Nigerian Exchange (NGX) under its base case scenario, with a forecast of 38.1 percent in its optimistic case scenario.

According to projections based on the Grinold-Kolner model used by Cardinalstone, the Nigerian Exchange (NGX) is expected to deliver positive returns for the sixth consecutive year. On a risk-adjusted basis, the NGX is forecasted to achieve a 15.6 percent return, with an impressive return-to-risk ratio of 1.63x.

After recording a price-to-earnings (P/E) ratio of 10.1x in 2024, Afrinvest projects that the Nigerian equities market could achieve a P/E ratio of 10.88x in its base case scenario and 11.88x in its optimistic case scenario for 2025. This projection indicates potential growth in valuation multiples, reflective of increased investor confidence, improved corporate earnings, and strengthened market fundamentals.

Read also: NGX-ASI up 1.76% in one week

For Cardinalstone, it was projected that the Nigerian Exchange may be reincluded in the MSCI Frontier Markets Index after it was reclassified as a standalone market in 2023.

Cardinalstone’s outlook read, “We assess that the FX dynamics of the country have notably improved in the past year and may be enough to convince MSCI to consider re-including Nigeria in the FM index.”

Giving BUY recommendations on SEPLAT and ARADEL, Cardinalstone analysts project that the oil and gas sector would be crucial to Nigeria’s economic growth in 2025. Afrinvest’s analysts also projected that the oil and gas sector would remain upbeat during the year despite slowing oil prices.

According to the research analysts, feedback from the flurry of corporate actions that occurred in 2024 would be a major driving force in the positive outlook of the market in 2025. In 2024, some of the corporate actions include Airtel Africa’s completion of the first phase of its $100 million share buyback, Tolaram’s acquisition of majority shareholding in Guinness Nigeria, Flour Mills of Nigeria’s delisting from the NGX, Presco’s acquisition of Ghana Oil Palm Development Company, and Transcorp’s share reconstruction.