Ruth Ibikunle
The Nigerian stock market closed the year 2023 on a positive note, returning 45.90% despite the tight economic realities the country experienced in the year.
The All Share Index of the Nigerian Exchange grew by 45.90%, closing the year at 74,773.77 points from 51,251.06 points it started the year with. The Market Capitalisation grew to N40.918 trillion, which represents a growth of 46.58% from N27.915 trillion market capitalization at the beginning of year 2023.
In a Stock Market Review with the MD/CEO of APT Securities and Funds Limited, Mallam Garba Kurfi, the following were discussed:
Excerpts:
The stock market in year 2023 closed on a bullish note with 45.90% growth. What is the outlook for the New Year?
The performance of the Capital market was wonderful for the year 2023. This is the first time the market has performed wonderfully in an election year. For four consecutive years, the All Share Index has closed positively.
We are also expecting the year 2024 to close positively too, although it may not be as much as the performance of the market in 2023. This is due to the fact that the President will continue with his efforts to sustain the pressure.
The banking sector recorded tremendous growth in price appreciation in 2023. With recapitalization of banks in view, what should we expect in the New Year?
The Banking Sector has done very well especially UBA which gained more than 200% while others such as Access Bank, ETI, Fidelity Bank, FCMB, FBNH did very well. Our expectations in this sector for the year 2024 is a positive one but not as much as year 2023.
The likely primary issues by Banks will slow the rising rates. That is one of the challenge that Capital Market will face in 2024 which may retard the rising of prices of stocks particularly Banking Shares. This will reduce the Capital gain in 2024 which will affect the performance of All Share Index.
Nigeria’s inflation rate has risen to 28.20%. How would this impact capital market participation?
The inflation rate of 28.20% will attract more new Investors into the Capital market to hedge inflation. There are no other financial Instruments that hedges against inflation except All Share Index.
The inflation for the year rose to 28.20% as at November 2023, this will push many Investors into Capital market in order to hedge it with about 46% returns for the same period ahead of other financial Instruments returns.
What investment strategy should be adopted in view of Q4 2023 results being expected from quoted companies on NGX?
The new strategy for Investors is: Look for newly listed Stocks and Primary issues.
The market already reflects the expectations of Q4 result in the stock market prices except waiting for the actual result to see if it meets with the desired result expectations.
What are the stocks to watch for the New Year?
The stocks to watch are Multiverse, DAAR, Dangote Sugar, NASCON amongst others.