In 2024, the Nigerian Stock Exchange recorded a 37.6% gain on the back of bullish investor sentiment in the oil and gas sector and insurance sectors. In the past year, the All Share Index (ASI) opened the year at 75,990.88 points and closed the year crossing the 100,000 points mark.
The performance of the market in 2024 was the best since the covid-19 pandemic in 2020. The bullish performance of the stock market was boosted by companies such as Conoil Plc which returned 361% increase in share price appreciation, Oando (528%), Sunu Assurance (877%), Julius Berger (261%) and others.
However, the banking index’s performance lagged compared to its performance in the previous year. Analyst were of the view that the downturn was caused by the recapitalization effort of the bank on the orders of the Central Bank of Nigeria (CBN).
By the year end, Nigerian banks led by Wema Bank, GTCO and United Bank of Nigeria (UBA) saw some bullish performance with its share price rising to an all-time high.
In 2025 so far, the NGX has seen marginal increases even as some companies have seen wild appreciation. Notably, the banking and insurance companies have seen some bullish momentum.
Like other years, the year 2025 is unique and the stock market is expected to react to its dynamism. Already, Nigerian banks are expected to complete the recapitalization effort by the year end to meet the CBN capital requirement which is billed to end by the first quarter of 2026.
In this outlook for stock performance in 2025, we’ll look at macroeconomic realities in key sectors/index of the NGX, potential new listings and delisting.
Oil, gas and power sector
This sector is expected to continue its bullish performance from 2024 especially with the renewed focus of the current administration in raising oil production to 2mb/d. This projection is underpinned by the performance of companies such as Oando, Aradel, Seplat and others.
Oando recently won the bid to viable oil fields in Angola and has plans to increase output from its holdings especially with the completion of its acquisition from NAOC interest in Nigeria. Also, the approval of hitherto delayed acquisition of onshore fields by the NUPRC is expected to reinforce investor confidence in the sector.
For the power sector, with companies like Geregu and newly listed Transpower are expected to continue their impressive performance in the market.
Telecommunications
The telecoms sector in the last year performed woefully on the back of reforms in the foreign exchange market which saw significant FX losses from major players.
MTN Nigeria led the way recording a pre-tax loss of N514.9 billion in the first nine months of the year mainly due to depreciation in the value of the naira. This resulted in a 33.5% decline in the value of its stock in the market placing it among the infamous top ten underperforming stock in 2024.
However, the sector is poised to recover from this malaise with the approval from the Nigeria Communications Commission (NCC) to increase tariffs by 50%. Also, MTN share price has seen significant gains in the year so far with investors showing voracious appetite to its Commercial Paper issuance.
Banking sector
Two critical issues will influence the performance of banking stocks in 2025- the potential assent to the windfall tax introduction to the amendment of the 2023 Finance Act and the need to meet the new capital requirements of the CBN.
The 70% tax on foreign exchange revaluation gain “windfall tax” of banks if signed into law might dampened investors’ confidence in the sector as there are fears that it might slice P/E ratio of banking stocks.
This is coming on the heels of effort by banks to raise the needed CBN capital requirements by the end of the first quarter of 2023. Already, the Access and Zenith Bank have met the CBN’s capital requirement for the category they fall into which has seen their share prices rice significantly. Zenith shares this week kissed N51- a 52week high.
There are also hopes of mergers or acquisitions in the sector but no tangible lead has been noted in that regard so far.
In 2024, the banking index of the NGX returned 19% in stock prices to shareholders and the outlook for 2025 is the index will show more resilience. Analyst at Afrinvest stated on her outlook for the sector stated thus, “In 2025, we expect banks to make significant progress from recapitalization exercise which would lead to positive investors’ sentiment in the sector, supported by much stable regulatory environment.”
Consumer and industrial goods
This sector has been the most hit by the reforms in the energy, and foreign exchange sectors of the economy. Although on the average, the index returned 47.6% on share price appreciation to investors. However, the sector is still plagued by depreciation of the Naira leading to high cost of raw materials, elevated interest rate and generally high operational cost.
The Industrial goods sector also returned 31% in average share price appreciation in the past year although profit performance was also affected by similar factors undermining the consumer goods sector.
In the past two years, the sector has seen significant exits with GSK leading the charge while the major investors in Guinness sold their holdings to Tolaram.
However, there is a glimmer of hope that the consumer and industrial goods indexes can begin turning the corner in 2025 with Guinness recording N20 billion in PBT and PZ Cussons cutting down losses by almost 100%. If this trend continues, it is expected to boost investors’ confidence in these indexes but the outlook remains doubtful with elevated inflation levels and MPR still on the high coupled with the volatility in the FX market still in the horizon.
Nathanael Disu, an investment research analyst posited on the outlook for these sectors, “Industrial goods sector is positive buoyed by expectation that moderating inflationary and FX pressure should translate to firmer business performance, even as FG’s infrastructure investment remains supportive”
On the consumer goods sector, he noted thus, “Consumer Goods sector near-term outlook remains cautiously optimistic with several domestic and global challenges likely to impact growth.”
Agriculture
There are no much agriculture companies listed on the NGX despite the sector being one of the biggest drivers of growth in the Nigerian economy. However, the major player in the index- (Okomu Oil and Presco Plc) have consistently delivered impressive returns in terms of share price appreciation and dividend payment to investors.
In 2024, the index’s capitalization jumped by 102% from N468.5 to N926.69 billion with Presco and Okomu oil representing over 90% of the figure.
The index is projected to continue its trend of strong performance that it has displayed in the past few years.
Potential new listings
The Chairman of Dangote Group, Aliko Dangote had stated in 2024 that the group will list the $20 billion Dangote refinery on the NGX in the first quarter of 2025. The listing is expected to significantly increase the market capitalization of the NGX. The firm had earlier stated it plans a dual listing of the refinery in both the London stock exchange and the Nigerian stock exchange in 2025.
Delisting
Potential delisting from the NGX include Guinness Nig Plc whose new owners- Tolaram has a reputation of not letting its companies go public. Also, PZ Cussons might continue its effort to delist after the process hit a brick wall last year.