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Financial Experts Foresee Shift in Focus Within Nigerian Capital Market for Q2 2024

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The Nigerian Exchange Limited (NGX) wrapped up the first quarter of 2024 on a positive note, buoyed by renewed investor confidence in listed companies. This achievement is noteworthy considering the prevailing economic challenges such as heightened inflation, currency depreciation, and ongoing security issues.

The optimism among investors has led to noticeable shifts in purchasing behaviors, culminating in the All-Share Index reaching an impressive closure at 104,562.06 index points by the end of the quarter. The year-to-date (YTD) return of the NGX All-Share Index stood at an impressive 39.84%, ranking it as the second best-performing exchange in Africa, following Zimbabwe.

Despite concerns over escalating inflation, potential interest rate adjustments, and volatile exchange rates, investor confidence remains resilient, driving increased market activity and heightened buying activities.

Market operators are optimistic about a bullish and active primary market in Q2 2024. They anticipate a shift in focus towards the primary market, particularly with the imminent banking recapitalization exercise. Additionally, corporate actions surrounding Q1’24 earnings and FY’23 dividend payments are expected to influence market dynamics in the coming quarter.

However, there are doubts about the sustainability of the prolonged rally observed in the secondary market for equities. Some analysts foresee a redirection of focus towards the primary market due to the banking recapitalization exercise, while others highlight the influence of corporate actions on investor interest.

Looking ahead, there is optimism regarding the market’s prospects in Q2 2024. Efforts by the Central Bank of Nigeria (CBN) to stabilize the exchange rate, supported by inflows from foreign portfolio investors and Diaspora remittances, are expected to contribute to sustained market growth.