Stock market operators have predicted that real output growth this year would range between 3.2 per cent and 3.4 per cent. The optimism was hinged on the improvement recorded in foreign exchange (FX) management, rising FX reserve and advancement in key reforms expected to drive growth in various sectors of the economy.

The stockbrokers noted that the Central Bank of Nigeria (CBN) has found a temporary solution to Nigeria’s FX problem, with the exchange rate expected to stabilise in 2025 due to rising FX reserves (now over 40 billion) and the full take-off of the Dangote Petroleum Refinery.

According to them, while the inflation rate is expected to fall in Q2 due to last year’s base effect, the interest rate will remain elevated in 2025, with the possibility of falling from the last quarter of 2025.Head of Equity, Planet Capital, Dr Paul Uzum, said the planned listing of Dangote refinery will be the largest listing ever done on the Nigerian capital market.

He noted that the stock will be representing about 33 per cent of the NGX market capitalisation, with a surge in the stock capable of dictating the direction of the entire market during the year.

He added that this would become the major driver of the NGX oil and gas index. He said: “We anticipate a price correction in the banking sector because investors will likely be disappointed with the payment of dividends by the banks. The real impact of the 75 per cent tax on foreign exchange gains made by the banks in the 2023/2024 financial years will be seen when the banks are compelled to make such payments to the FIRS, as their tax liability will increase significantly.

“The banks were mandated to raise additional equity capital in 2024, which made them issue so many new shares that will rank pari passu with existing shares and also qualify for dividends. Many investors will be shocked when the final dividend payment fails to meet expectations.

“Since the conclusion of the capital raise by the banks in 2024, their share price has been on an upward surge; we will see a price correction when the new shares are listed in 2025.”

For the consumer goods firms that have suffered FX losses over the last two years, he said these stocks would record significant improvement in 2025, as there will be no more FX losses due to the stability of the naira.

“From Q1, 2025, we expect to start seeing profits in Nestle, Guinness, Nigerian Breweries, Cadbury, and Dangote Sugar. We also anticipate that the planned merger between Dangote Sugar and NASCON will pull through in 2025,” he said.

On the industrial goods sector, Uzum said Dangote Cement will record some price correction as investors would continue to sell until its dividend and earnings yield align with the trend for listed companies in the market, noting that the focus of Africa’s richest man will shift to his listed refinery business.

In addition, he said the insurance sector will see significant attention in 2025 as firms in the sector battle to raise capital to meet the revised capital base for insurance companies in Nigeria.

“An upward surge in the prices of most insurance companies was seen in 2024; it is expected to continue in 2025. Unlike in the distant past, when good performance in the sector was limited to Custodian, Mansard, and NEM insurance, almost all insurance firms are posting decent results now.

However, he pointed out that sustaining investors’ confidence and patronage in the sector would depend on their ability to back up their growth in profit with a strong dividend payout.

Uzum said there is anticipation that the Nigerian Communications Commission (NCC) would approve the planned revision of tariffs for the telecom sector, which will see calls, SMS, and data costs rise by as much as 40 per cent.

Vice President of Highcap Securities Limited, David Adonri said the primary and secondary market segment of the nation’s equities market is expected to boom in 2025.

Closing year 2024 with an all-share index (ASI) of 102,926.40, culminating in a 37.7 per cent gain, the operators noted that the boom in the primary market segment will be propelled by the continuation of banking sector recapitalisation exercise while the secondary market rally is hinged on the realisation of the 15 per cent inflation rate.

He pointed out that corporate recovery by major companies that suffered foreign exchange losses will positively impact the secondary market for equities in 2025.

However, he stated that yield on debt is expected to decline if the inflation target of 15 per cent is achieved. According to him, this will lead to an increase in debt issuances and possible migration to equities.

“2025 may see the listing of digital assets in the Nigerian Capital Market as issuers take advantage of the favourable environment created by new SEC rules,” he said.