The Nigerian Exchange Limited closed the first quarter of 2024 on a high note, amid renewed investor confidence in listed companies.
Despite the adverse economic conditions, like rising inflation, currency depreciation, and continuing security challenges, this excellent performance is a major achievement for NGX, according to nairametrics.
This prevailing optimism has led to a marked change in purchasing patterns, resulting in the All Share Index closing at 104,562.06 index points for the last quarter.
The year-to-date (YTD) return of the NGX All-Share Index revealed its strength, standing imposingly at 39.84% and ranked as the second best-performing in Africa, trailing behind the Zimbabwean exchange.
The confidence of the investors was exceptionally resolute, despite rising inflation, future interest rate adjustments, and volatile exchange rates.
In the second quarter of 2024, market operators are full of optimism for a robust and actively growing primary market.
The market operators projected that Q2’2024, the primary market for equities may take center stage, in Q2’2024 driven by the imminent launch of the recapitalisation of the banking sector.
They also believe that the equities market would be largely driven by corporate action around Q1’24 earnings and dividend payments for FY’23 results which will be announced and paid in Q2 2024.
The Managing Director of Highcap Securities Limited, Mr. Adonri, Mr Adonri, foresees a major change in the Nigerian capital market’s dynamics for the next 2nd quarter of 2024.
He foresees an important shift from primary markets to primary markets, given the imminent take-off of a bank recapitalisation exercise.
He said, “Due to the takeoff of the banking recapitalization exercise, emphasis on the Nigerian Capital Market is expected to shift to the primary market in Q2 2024.
“We predict a redirection of focus towards the primary market as a result of the impending banking recapitalization exercise.”
Meanwhile, analyst and Head of Research at FSL Securities Limited, Mr Victor Chiazor presented his forecast for the equity market, focusing on the influence of company actions, concerning Q1’24 earnings and dividend payments in FY23 results.
In Chiazor’s view, companies with impressive Q1’24 results and offering attractive dividend yields for FY23 are in a position to attract increased investor interest, which could lead to an increase in their share price.
“The equities market would be largely driven by corporate action around Q1’24 earnings and dividend payments for FY’23 results which will be announced and paid in Q2 2024.
Companies with impressive Q1’24 results and decent dividend yields for FY’23 are expected to attract higher investments towards their shares compared to those with weak earnings and lower dividend yields especially given the high-interest rate environment,” he said.
On the other hand, Chiazor pointed out that, given the prevailing high-interest rates environment, companies with weak earnings and lower dividend yields may find it difficult to attract investors’ attention.
