As the Nigerian equities market prepares to wrap up 2023 on a positive note, with the NGX All-Share Index already up 43.94% year-to-date, investors are anticipating attractive entry points in the new year.
This optimism stems from several factors, including strong market performance. The bullish trend, driven by increased buying pressure in key sectors like Oil and gas, Telecommunication, and Industrial Goods, indicates investor confidence.
Resilience amidst challenges, the market navigated headwinds such as the Central Bank’s interest rate hike and rising inflation, demonstrating underlying strength.
Ebbing pre-election uncertainty, with the 2023 elections concluded, domestic and foreign investor sentiment is expected to improve, potentially fueling further growth.
While the outlook for 2024 appears promising, caution remains warranted. Investors should prioritize:
Investment analysts’ recommendations: Investment analysts who spoke to Naijaonpoint said the Oil and gas sector, industrial goods sector, consumer goods sector, and telecommunications sector are sectors to invest in this New Year.
Below are the recommendations on stocks to invest N2 million in right now, according to the investment analysts.
In an exclusive interview with Nairmetrics, Mr. Mike Eze, Managing Director of Crane Securities Limited, demystified the key factors to consider when investing in the Nigerian capital market. He identified four pillars guiding investment decisions: return on investment (capital gain), dividend payout, bonus issue, and stability of capital.
Stressing the importance of understanding individual investment goals, Eze cautioned against solely chasing high-priced equities.
Eze further differentiated strategies for capital gains and income-oriented investors.
Acknowledging the current market dynamics, Eze pointed out that many banks’ shares might not guarantee short-term returns due to elevated prices.
Eze listed stocks like BUA Foods Plc, Dangote Sugar Plc, PZ Cussons Plc, Unilever Plc, MTNN Plc, Total Energies Plc, Seplat Energies Plc, BUA Cement Plc and Julius Berger Plc as good stocks to buy at the beginning of the year 2024.
According to him, the reason is that the stocks are still very attractive and still have the propensity to go higher in price which will enable investors to have a good capital gain.
Mr. Olatunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited, also shared his perspective on promising sectors and specific stock picks with Naijaonpoint.
Mr. Amolegbe sees robust potential in two key sectors, oil and gas and telecommunications.
In the oil and Gas sector, he identified Seplat Energies Plc (SEPLAT) and TotalEnergies Plc (TOTAL) as attractive plays while in telecommunications he picked MTN Nigeria Plc.
In the oil and Gas sector, he identified Seplat Energies Plc (SEPLAT) and TotalEnergies Plc (TOTAL) as attractive plays while in telecommunications he picked MTN Nigeria Plc.
He noted that the stocks are still very attractive and have the tendency to go higher in price which will enable investors to have a good capital gain.
While acknowledging the appeal of dividend-paying stocks, Amolegbe urges caution.
He advised that investors should meticulously evaluate a company’s financial health, dividend payout history, and sustainability before basing decisions solely on dividend yields.
Mr. David Adonri, executive vice chairman, of Hicap Securities Limited, while acknowledging the traditionally higher dividend yields in the banking sector, highlighted the growth potential of telecoms giants like MTN Nigeria Plc, the dominant player in the Nigerian mobile market, boasting a vast subscriber base and continuous investments in network expansion and technology.
He noted that the company offers investors the opportunity to participate in the ongoing digital transformation of Nigeria, potentially generating significant capital appreciation alongside moderate dividend yields.
Adonri also picked stocks in the industrial sector such as Dangote Cement, Lafarge Cement, and BUA Cement as having good potential.
According to him, these companies are expected to report strong earnings in the final quarter, driven by increased construction activity and rising demand for cement.
It’s crucial to remember that investing involves inherent risks, and careful consideration is essential before making any decisions.
Consulting with a financial advisor can be a powerful tool for making informed investment decisions, achieving your financial goals, and securing a brighter financial future.
By understanding promising sectors, conducting diligent research, and employing prudent risk management strategies, investors can navigate the exciting opportunities that lie ahead. Remember, knowledge is power in the market – use it to make informed decisions and unlock your investment potential in the coming year.