Investors eye landmark listings on NGX in 2024

The Nigerian Exchange is poised for significant changes in 2024, with major listings expected to drive renewed engagement in the market. Analysts are optimistic about the forecast for the IPO market next year, citing the potential listings of Dangote Petroleum Refinery, the Nigerian National Petroleum Company Limited (NNPCL), and other government-owned enterprises as catalysts for growth. Adebayo Adebanjo, Senior Analyst at Cardinalstones Securities, shared insights on the upcoming developments during a recent interview with CNBC Africa. 2023 has been a pivotal year for corporate actions, setting the stage for a transformative period in 2024. The news of potential government entities transitioning to the private sector through initial public offerings (IPOs) is expected to deepen the capital markets and broaden the participation of Nigerians in the equity market. The Nigerian equity market has already shown robust performance this year, with a year-to-date return of around 41% and a significant increase in market capitalization. A key highlight of the market dynamics is the dominance of local players, accounting for approximately 88% of total capital market participants, while foreign investors make up the remaining 12%. The influx of new listings and the privatization of government entities are likely to attract more participants, further enhancing market depth and efficiency in service offerings. The potential listing of NNPCL and Dangote Refinery is expected to mirror the success of existing businesses on the exchange, such as Dangote Sugar and Dangote Cement. Adebayo Adebanjo emphasized the positive outlook for 2024, drawing parallels to the telecom sector's liberalization in the late 1990s, which significantly contributed to Nigeria's non-oil GDP. Regarding the oil and gas sector, Adebanjo highlighted the significance of investments in increasing production and addressing challenges faced by local players. With Dangote Refinery set to commence operations, there are opportunities for growth in the sector despite global trends moving towards renewable energy sources. The expected listing of Dangote Refinery on the exchange is poised to bolster the oil and gas index's performance. Furthermore, discussions around potential mergers and acquisitions, such as CEPLAT's plans to acquire Mobile Nigeria Producing Unlimited assets, indicate a positive outlook for the sector. The deal, once finalized, is projected to enhance CEPLAT's operations significantly, leveraging the acquired assets to drive production levels. Additionally, investments in offshore assets are seen as a strategic move to mitigate risks associated with onshore operations. In light of the increasing production levels and ongoing industry developments, Nigeria's oil and gas sector presents notable opportunities for growth in 2024. Despite OPEC quotas and global trends towards renewables, local players are poised to capitalize on existing assets and strategic investments to drive production and contribute to the sector's overall performance. In conclusion, the Nigerian Exchange is gearing up for a transformative year in 2024, characterized by landmark listings and increased market activity. The anticipated IPOs of key government entities and private enterprises are expected to inject vitality into the market, fostering greater participation and unlocking new growth opportunities.