After an impressive performance in 2023 that positioned the Nigerian stock market ahead of its African counterparts, the market’s growth in 2024 is expected to receive a boost from significant listings such as Dangote Foods, IHS, Dangote Refinery, and NNPCL.
Olumide Adesina of Quantum Economics, in a post on his X (formerly Twitter) handle, advised investors to closely monitor the stock market, emphasizing the anticipation surrounding the listings of Dangote Foods, IHS, Dangote Refinery, and NNPCL.
Dangote Foods
The merger of Dangote Sugar with NASCON Allied Industries Plc (NASCON) and Dangote Rice Limited (DRL) to create a new entity named Dangote Foods is anticipated to result in a consumer goods giant with a market capitalization of N1.50 trillion.
Closing the year 2023, the Nigerian equities market recorded an equities capitalization of N40.917 trillion and NGX All Share Index (ASI) at 74,773.77 points, ending the year with a notable return of 45.90 percent.
With recent key appointments at the NGX, Jude Chiemeka, assuming the role of Acting Chief Executive Officer (CEO) of Nigerian Exchange Limited (NGX) from January 1, 2024, is tasked with driving market growth through the addition of new listings.
Umaru Kwairanga, Chairman of NGX Group Plc, expressed confidence in Chiemeka’s ability to lead the NGX, building upon Temi Popoola’s accomplishments and fostering continued growth in the capital market.
The proposed merger of Dangote Sugar Refinery Plc, NASCON, and Dangote Rice Limited (DRL) to form an enlarged company was announced by their respective boards on July 31, 2023, resulting in the creation of Dangote Foods.
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NNPC Ltd
Another influential listing expected in the market this year is that of the Nigerian National Petroleum Company Limited (NNPC Ltd), which recently reiterated plans to conduct an Initial Public Offering (IPO) soon. Mele Kyari, the Group Chief Executive Officer (GCEO) of NNPC Limited, shared this information at the 22nd edition of the 2023 Nigeria Oil and Gas (NOG) Energy Conference and Exhibition.
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Parthian Partners
Parthian Partners, an indigenous interdealer brokerage firm, projected that both the Nigerian National Petroleum Corporation Limited and Dangote Refinery would be listed on the Nigerian capital market in 2024. This projection was unveiled during the launch of their 2024 Economic Outlook titled ‘Equities Market Frothiness: Navigating the Thin Ice.’
Oluwaseun Dosunmu, Head of Investment Research at Parthian Securities, who provided an in-depth analysis of the economic outlook for 2024, anticipates a gradual U-shaped recovery across various investment assets this year. He highlights the likelihood of a slowing economy and a potential recession, which could exert pressure on corporate profits and influence asset prices.
Dosunmu predicts a high-interest rate environment, the recapitalization of the banking industry, capital raising by certain listed companies, mergers and acquisitions within the banking sector, a potential increase in energy capacity, and the probable listing of Dangote Foods, Dangote Refinery, and NNPC Limited.
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IHS Towers
IHS Towers, a prominent player in shared communications infrastructure globally, made history in 2021 by becoming the first Nigerian-rooted company to be publicly traded on the New York Stock Exchange (NYSE). This move symbolized Nigeria’s significant potential on the global stage, fostering global investor engagement and educating international investors about the advantages of investing in Nigeria.
Recently, Nigerian entrepreneur Iyinoluwa Aboyeji, co-founder of Andela and Flutterwave, declared his intention to acquire a substantial amount of IHS Towers stock in 2024. Aboyeji, a founding partner at Future Africa, shared this announcement on X (formerly Twitter), stating that he sees IHS Towers becoming the infrastructure backbone of Nigeria’s digital revolution. He expressed a desire for the company to list on the Nigerian Exchange Limited (NGX) so that he could make additional purchases in Naira.
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Government Reforms and Challenges
In their outlook for the year, analysts at Vetiva Research noted that the Nigerian equity market has benefited from recent government reforms. However, they highlighted ongoing challenges such as inflation and fuel price rigidity. The trajectory of the market will depend on how these issues are addressed and the government’s commitment to reform implementation.
What to Expect
The analysts emphasized the mixed nature of the market outlook, with the potential for a currency devaluation not entirely ruled out. Additionally, concerns over fuel price rigidity in the Oil and Gas sector, particularly related to the NNPC’s effective price cap and persistent worries about the partial subsidy regime, have dampened sentiment in the industry. Investors will closely monitor the pace, sustainability, and effective implementation of these reforms by the government.
