By Kayode Ogunwale

Mr Olatunde Amolegbe, the Managing Director of Arthur Steven Asset Management Limited (ASAM) and a former President of the Chartered Institute of Stockbrokers has expressed a strong belief that the capital market is poised for a significant transition towards equities. This anticipated shift is primarily attributed to a declining outlook on fixed-income yields, which is expected to be influenced by the Central Bank of Nigeria’s (CBN) potential move towards a more accommodative monetary policy.

During his presentation at the annual gathering of the Capital Market Correspondents Association of Nigeria (CAMCAN), themed “In-Depth Evaluation of the Capital Market in 2024 and Prognosis for 2025,” Mr Amolegbe shared his assessments on Thursday in Lagos. He highlighted that despite the persistent challenges posed by exchange rate volatility and inflationary pressures that continue to loom over the mark favourable in conservative sectors specifically banking, consumer goods, and industrials are projected to demonstrate resilient performance.

Amolegbe emphasised that these sectors are likely to provide stable returns to investors, suggesting a favourable investment climate for those looking to navigate the complexities of the current economic landscape.

His analysis reflects not only the dynamics of market sentiment but also underscores the underlying potential for growth within these more conservative areas of the economy, offering a glimmer of optimism for stakeholders preparing for the investment opportunities that 2025 may hold.

In the palm oil industry, robust growth is forecast for key players such as Okomu Oil Palm Company (OKOMUOIL) and Presco Plc. Sustained global demand for palm oil, coupled with rising prices and improved production volumes, are projected to drive growth in the sector, with expected returns ranging between 18 per cent and 25 per cent. Presco’s recent bond issuance to fund its acquisition of Ghana Oil Palm Development Company Limited is seen as a strategic move that further solidifies its growth prospects.

The consumer goods sector is also set for a rebound, recovering from the inflationary challenges of 2024. ASAM’s positive outlook for the sector is based on expectations of lower inflation, a more stable foreign exchange environment, and supportive government policies. Proposed tax modifications in the Economic Stabilization Bill, along with access to trade credit facilities, are expected to foster a favorable business climate. Additionally, ongoing efforts by the CBN to narrow the gap between official and parallel exchange rates are likely to improve access to foreign exchange, benefiting companies in the consumer goods sector.

He said the Nigerian stock market is poised for significant growth in 2025, with ASAM projecting a 39 per cent return on the All-Share Index (ASI).

According to Amolegbe, this forecast is underpinned by ongoing bank recapitalization efforts, new equity listings, and anticipated monetary policy easing by the Central Bank of Nigeria (CBN).

Amolegbe highlighted Nigeria’s relative market attractiveness as a key factor in attracting increased foreign portfolio inflows (FPI), provided stable policies are maintained.

He noted that the bank recapitalization process is set to boost investor confidence, while high-profile listings such as Dangote Refinery are expected to enhance market liquidity and broaden investment opportunities.

The projected bullish trend in 2025 comes as investors position themselves ahead of 2024 fiscal year results and dividend declarations, particularly in the banking sector. However, Amolegbe cautioned that the market’s performance will depend on critical factors such as the country’s economic growth trajectory, monetary policy direction, and corporate earnings results.

Overall, the 2025 outlook for the Nigerian stock market remains optimistic, bolstered by strategic reforms, policy adjustments, and improving investor confidence. While challenges such as exchange rate instability and inflation persist, key sectors are positioned to drive market performance and deliver strong returns for investors.