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Business News of Monday, 16 January 2023


Stock market: Analysts see positive sentiment despite headwinds

Floor of the Nigerian Stock Exchange Floor of the Nigerian Stock Exchange

Analysts at Investment One Research have projected that the positive momentum recorded in the past three years on the NGX will be sustained in 2023, albeit at a moderate pace.

The analysts stated this in their 2023 microcosmic and financial market outlook report tagged ‘Unboxing the New Realities’.

Expected bullish sentiment: They noted that a major catalyzing factor is a bullish sentiment expected in Q1 to be buoyed by investors positioning ahead of 2022 full-year corporate disclosures and possible re-investment of dividends earned.

The analysts added that another eventful factor that should buoy sentiments in the market was Dangote Cement Plc’s share buyback of up to 1,687,355,925 (10%) of its issued shares which has been unanimously approved by the shareholders at the last Extra-ordinary General Meeting (EGM) held in December 2022.

Performance determinant: They explained that further into the year, the direction of market performance will be largely determined by the trio impact of fixed income yields in tandem with monetary policy, corporate actions, and election turnouts.

They said:exhibited towards election seasons as propelled by the aforementioned factors.

“It is worthy of note that foreign investors’ participation in the local bourse was quite significant over these periods, printing at 49.00%, 54.00% and 66.00% for 2019, 2015, and 2011, respectively, while as of November 2022, foreign investors only constitute 17.00% of total market participation.

“For us, we think the change in structure with respect to investor participation will bode well for market performance, mitigating any significant potential downside risk from the electioneering process.

“Post-election, barring any heated tensions from the election with respect to who clinches the presidential seat, we expect to see a positive turnout in the bourse on the back of our opinion of the three major candidates being pro-market.”