• Wednesday, February 28, 2024
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BusinessDay

These listings will shape Nigeria stock market in 2024

Investors trade N651.52bn worth of stocks in January

…Dangote Foods, IHS, Dangote Refinery, NNPCL are low hanging fruits

After a successful outing in 2023 which placed the Nigerian stock market above its African peers, the market growth in 2024 will be aided by major listings like Dangote Foods, IHS, Dangote Refinery, and NNPCL.

“Keep your eyes on the stock market. Markets anticipate the listing of Dangote Foods, IHS, Dangote Refinery, and NNPCL,” Olumide Adesina of Quantum Economics said in his X (formerly Twitter) handle.

The merger of Dangote Sugar with NASCON Allied Industries Plc, (NASCON) and Dangote Rice Limited (DRL), to form a new entity to be known as Dangote Foods will lead to a consumer goods giant having a market capitalisation of N1.50 trillion.

The Nigerian equities market closed the year 2023 with equities capitalisation at N40.917trillion and NGX All Share Index (ASI) at 74,773.77 points. The market finished 2023 with returns of 45.90 percent.

Following major appointments at the NGX, Jude Chiemeka who is the Acting Chief Executive Officer (CEO) of Nigerian Exchange Limited (NGX) effective January 1, 2024 has among others the mandate of driving market growth through new listings.

Umaru Kwairanga, Chairman of NGX Group Plc said he firmly believes in Chiemeka’s ability to seamlessly assume leadership at NGX from Temi Popoola “building upon his impressive achievements and fostering continued growth in the capital market.”

Dangote Sugar Refinery Plc, NASCON and Dangote Rice Limited (DRL) had following deliberations by their respective boards as at July 31, 2023 announced the proposed merger of the entities to form one enlarged company.

Another major listing that will shape the market this year is that of the Nigerian National Petroleum Company Limited (NNPC Ltd) which recently restated plans to issue its shares by way of Initial Public Offering (IPO) to investors very soon.

Mele Kyari, Group Chief Executive Officer (GCEO) of NNPC Limited noted this at the 22nd edition of the 2023 Nigeria Oil and Gas (NOG) Energy Conference and Exhibition.

Indigenous interdealer brokerage firm, Parthian Partners projected that the Nigerian National Petroleum Corporation Limited and Dangote Refinery would be listed on the Nigerian capital market in 2024.

This projection was revealed when the company launched its 2024 Economic Outlook titled ‘Equities Market Frothiness: Navigating the Thin Ice.’

Oluwaseun Dosunmu, Head of Investment Research at Parthian Securities who unpacked the economic outlook for 2024 forecasts a gradual U-shaped recovery across investment assets this year, noting that a slowing economy and possible recession would likely pressure corporate profits and weigh on asset prices.

Dosunmu foresees high-interest rate environment, recapitalisation of the banking industry, capital raising by some listed companies, mergers and acquisitions in the banking industry, prospective energy capacity increase as well as the likely listing of Dangote Foods, Dangote Refinery and NNPC Limited.

IHS Towers, one of the largest independent owners, operators and developers of shared communications infrastructure in the world recently held a meeting with President Bola Ahmed Tinubu at the sidelines of the United Nations General Assembly (UNGA).

The company made history by becoming the first Nigerian-rooted company to be publicly traded on the New York Stock Exchange (NYSE) in 2021, symbolising Nigeria’s immense potential on the world stage, fostering global investor engagement, and playing a significant role in educating international investors on the advantages of investing in Nigeria.

Recently, Iyinoluwa Aboyeji, a Nigerian entrepreneur who co-founded Andela and Flutterwave said he is buying a lot of IHS Towers stock in 2024, staying why.

Aboyeji, founding partner at Future Africa, provoked conversation on X (formerly Twitter).

His eye-opening tweet ‘I am buying a lot of IHS stock in 2024’ got many X users talking about one of the largest telecommunications infrastructure providers in Africa, Latin America and the Middle East by tower count and the fourth largest independent multinational tower company globally.

“I am buying a lot of IHS stock in 2024. That company is going to be the infrastructure backbone of Nigeria’s digital Revolution. I just need them to list on NGX so I can buy more in Naira”.

In their outlook for this year, Vetiva Research analysts said: “the Nigerian equity market has benefited from recent government reforms, but challenges like inflation and fuel price rigidity persist. 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.

“Concerns over fuel price rigidity, with the NNPC’s effective price cap, have dampened sentiment in the Oil and Gas sector, particularly as partial subsidy regime worries persist,” they noted further.