Reflecting on the First Quarter and Previewing the Second Quarter
The Nigerian Exchange (NGX) kicked off 2024 with a bang, surging past the 100,000 point mark in January! But hold on, the ride wasn’t all smooth sailing. February saw a pullback, and investors faced hurdles throughout the quarter. So, how did it all end?
Q1 2024 Market Recap:
The first quarter of the year brought an impressive start for the Nigerian Exchange (NGX), with the market performing exceptionally well. On January 24th, 2024, the NGX All-Share Index broke past the 100,000 points mark, boosted by strong performances in the banking and high-cap sectors, including stocks like BUACEMENT, GEREGU, DANGCEM, and SEPLAT. However, in the following month of February, there was a decline as profit-taking and economic difficulties caused a noticeable pullback.
Amidst these hurdles, market activities showed signs of resurgence as the quarter progressed, buoyed by significant events such as the listing of Transcorp Power and corporate actions like dividend declarations. The announcement of proposed bank recapitalization by the CBN Governor injected further optimism into the market.
Despite facing two consecutive monetary policy rate hikes, the quarter concluded positively, with an impressive year-to-date return of 39.84%.
In summary, while the first quarter of 2024 presented challenges, the NGX demonstrated resilience and closed positively, reflecting the underlying strength of the Nigerian equities market.
Looking ahead to Q2, 2024...
We expect mixed performance in Q2 as market dynamics will potentially be influenced by macroeconomic instabilities (such as continued rise in inflation & FX instability), corporate actions (such as more dividend declarations & specific stock events like the mergers of NASCON, DANGSUG & DANGRICE and the listing of Dangote foods on the NGX), and capital raising activities in the banking sector. Additionally, we foresee that the hawkish monetary stance by the CBN and lackluster Q1 corporate earnings might drive equity investors towards exploring alternative investment options with more appealing returns.
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