2024: A Year of challenges, Uncertainty, and opportunities

Dear Investors,

Global growth is expected to taper down to 2.9% in 2024, from 3.5% in 2022 and 3.0% in 2023, according to the IMF. The World Bank made a less than optimistic 2024 outlook, forecasting that global GDP growth would slow for the third year in a row to 2.4%, which will leave poverty reduction goals at risk. Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4 percent in 2024, with a modest decline in growth from 4.1% in 2022 to 4.0% in 2023 and 2024 in both Emerging and Developing Economies. For Nigeria, a GDP growth of 3.1% is anticipated for 2024, up from a 2.9% growth projection in 2023. Growth in the Nigerian economy continues to stabilize, as the effect of key reforms unfolds in 2023 and 2024.

We anticipate that the Nigerian equities will sustain a positive return in 2024. However, while rallies are expected to continue until the middle of February 2024, by the end of Q1, the ASI which reached 94,538.12 on 19th January, is expected to recede below the 80, 000 mark. This potential downturn would be attributed to an expected interest rate hike by the central bank, which might exacerbate borrowing conditions for firms. Additionally, the persistent inflationary pressures continuing to impact households may result in investors depleting their portfolios. Subpar dividend declaration by companies may dampen optimism in the market.

Stocks selected in our portfolio are fundamentally sound, stable and have produced higher risk adjusted returns in the past few years. The rally in December/January 2024 has pushed some of these stocks above their intrinsic value and exit prices. We advise investors to sell at the current market high and buy back in February/ March when we expect a dip in the market and hold their positions till year 2024. Our weekly reports will provide further guidance on actions to take along the year.

Please click here to read more on our Economic Outlook for 2024.