By Dipo Olowookere
In the first week, month, and quarter of 2024, dividend-paying stocks will be the toast of investors at the Nigerian Exchange (NGX) Limited as the earnings season approaches.
From next month, a few companies listed on the stock exchange, like United Capital and Secure Electronic Technology, will begin to release their financial statements for the 2023 fiscal year, though more are expected in March and April 2024, especially those in the banking sector.
The performance of the equity market and the sharp price appreciation posted by some equities last year will spur investors to quickly buy shares of companies they are sure will declare dividends. These include Dangote Cement, Zenith Bank, GTCO, UBA, and MTN Nigeria, among others.
As the market resumes trading activity today, Tuesday, January 2, 2024, after a break on Monday for the New Year’s Day celebration, Business Post analysts expect a mixture of bargain-hunting and profit-taking.
However, the core activity expected today is portfolio rebalancing, as traders will want to take another look into their investment strategies, deciding whether to raise their risk level or not. This will make them to decide if to remain in the stock market or concentrate on the fixed-income market.
With the NGX outpacing inflation last year, gaining 45.90 per cent, and Transcorp Hotels surging by 1,022.9 per cent in the year, and others rising above 500 per cent, one may not need a seer to project where the decision will tilt.
But one of the major factors that would shape their decision on this is another look at the economic reforms of President Bola Tinubu. Investors will chew on his nationwide broadcast yesterday and see if they can go to the bank with his words.
The Nigerian economy has been struggling since he assumed office on May 29, 2023, especially after he declared an end to the payment of petrol subsidies.
A few weeks later, the Central Bank of Nigeria (CBN) unified the exchange rates, and since then, the Naira has suffered, hitting its worst level of N1,099/$1 last month at the official market and selling above N1,300/$1 at a time in the parallel market in 2023, making the cost of goods and services rise, with inflation reaching 28.20 per cent in November.
In his speech yesterday, Mr Tinubu admitted that these two policy decisions have brought hardships to Nigerians but maintained they were in the best interest of the country.
“Over the past seven months of our administration, I have taken some difficult and yet necessary decisions to save our country from fiscal catastrophe.
“One of those decisions was the removal of fuel subsidies, which had become an unsustainable financial burden on our country for more than four decades.
“Another was the removal of the chokehold of a few people on our foreign exchange system that benefited only the rich and the most powerful among us.
“Without a doubt, these two decisions brought some discomfort to individuals, families, and businesses,” he said.
“Dear Compatriots, take this from me: the time may be rough and tough; however, our spirit must remain unbowed because tough times never last,” he added.
