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How Bank recapitalisation, new listings, others will spur 39% ASI growth in 2025

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By Chioma Obinagwam

The ongoing recapitalisation exercise in the banking sector as well as new listings in the capital market is expected to trigger growth in the All Share index of the Nigerian Exchange Group (NGX) in the year 2025.

Those were the projections of the Managing Director of Arthur Steven Asset Management Limited (ASAM), Olatunde Amolegbe, in his presentation at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2024 market review and 2025 projection tagged “In-Depth Evaluation of the capital market in 2024 and prognosis for 2025” held on Thursday in Lagos.

Confiance News gathered that an All-Share index is a stock market index that represents the average performance of all the listed companies on a stock exchange over time; and is used to ascertain the overall health and direction of the stock market.

He said: “Nigeria’s relative market attractiveness, if supported by stable
policies, could lead to increased foreign portfolio inflows (FPI). We projected 39% return on the All-Share Index (ASI) driven by ongoing bank recapitalization, fresh equity listings, and anticipated monetary
policy easing by the Central Bank of Nigeria (CBN). The recapitalization process is expected to boost investor confidence,
while new listings like the Dangote Refinery will enhance market liquidity.”

“We anticipate a shift toward equities as fixed-income yields decline, particularly as the CBN adopts a more accommodative stance,” he continued.

Amolegbe, who is also a former President of the Chartered Institute of Stockbrokers (CIS), highlighted Nigeria’s relative market attractiveness as a key factor in attracting increased foreign portfolio inflows (FPI), provided stable policies are maintained. He noted that the bank recapitalization process is set to boost investor confidence, while high-profile listings such as Dangote Refinery are expected to enhance market liquidity and broaden investment opportunities.

The projected bullish trend in 2025 comes as investors position themselves ahead of 2024 fiscal year results and dividend declarations, particularly in the banking sector. However, Amolegbe cautioned that the market’s performance will depend on critical factors such as the country’s economic growth trajectory, monetary policy direction, and corporate earnings results.

ASAM anticipates a shift toward equities as fixed-income yields decline, driven by the CBN’s likely adoption of a more accommodative monetary stance. Despite lingering concerns over exchange rate volatility and inflation, conservative sectors such as banking, consumer goods, and industrials are expected to perform well, offering steady returns for investors.

In the palm oil industry, robust growth is forecast for key players such as Okomu Oil Palm Company (OKOMUOIL) and Presco Plc. Sustained global demand for palm oil, coupled with rising prices and improved production volumes, are projected to drive growth in the sector, with expected returns ranging between 18% and 25%. Presco’s recent bond issuance to fund its acquisition of Ghana Oil Palm Development Company Limited is seen as a strategic move that further solidifies its growth prospects.

The consumer goods sector is also set for a rebound, recovering from the inflationary challenges of 2024. ASAM’s positive outlook for the sector is based on expectations of lower inflation, a more stable foreign exchange environment, and supportive government policies. Proposed tax modifications in the Economic Stabilization Bill, along with access to trade credit facilities, are expected to foster a favorable business climate. Additionally, ongoing efforts by the CBN to narrow the gap between official and parallel exchange rates are likely to improve access to foreign exchange, benefiting companies in the consumer goods sector.

The ASAM boss is optimistic that the 2025 outlook for the Nigerian stock market remains optimistic, bolstered by strategic reforms, policy adjustments, and improving investor confidence. While challenges such as exchange rate instability and inflation persist, key sectors are positioned to drive market performance and deliver strong returns for investors.

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