Investment researchers and Economists at Bancorp Securities Limited, a leading investment and economic research consulting firm, have projected that trading on the Nigerian Exchange this week will be characterized by mixed sentiment as investors will rebalance their portfolios following the recent releases of full-year results of many listed entities in the local bourse.
The experts, in the firm’s Weekly Stock Recommendation for February 3rd – February 5th 2025’ circulated to our correspondent on Monday, projected that there would be “mixed sentiment in the market this week as investors rebalance their portfolios in response to the full-year results released so far. “
According to them, technically, the market remains in a long-term uptrend but is experiencing a correction driven by profit-taking.
Also, the analysts predicted that liquidity in the Banking and Consumer Goods sectors was expected to improve, supported by enhanced forex availability with the attendant implications for driving renewed interest in select stocks, particularly those with strong earnings resilience and sectoral tailwinds.
On the investment outlook and likely impact on the Economy and Markets, the researchers noted that as the Central Bank of Nigeria (CBN) continued on its path to ensure the stabilization of the Naira by clearing off $7 billion in foreign exchange (FX) backlog owed to various firms, the clearance was expected to alleviate liquidity constraints in the Nigerian market, enabling companies to repatriate profits and meet international obligations more efficiently.
In addition, they pointed out that the apex bank’s action should bolster investor confidence, potentially attracting further foreign investment.
The Bancorp Securities experts disclosed that they saw the impact of this move last week as the Naira appreciated by 3.59%, reflecting early signs of stabilization in the FX market, adding, however, whether this appreciation is sustainable or a short-term reaction remains a key concern, as it will largely depend on the CBN’s ability to maintain liquidity injections and prevent renewed FX shortages.
This is even as they pointed out that with the CPI and GDP rebasing figure expected this week, Nigeria’s economic recalibration could unlock fresh FDI inflows, particularly in non-oil sectors, even as a stronger outlook would reinforce capital allocation to manufacturing, financial services, and technology, deepening market participation.
However, the analysts maintained that inflation remained a structural challenge, with rising food and energy costs complicating monetary policy.
To ensure that the benefits of the apex bank’s measures positively impact on the economy, the experts advocated: “The CBN must balance rate stability with growth, ensuring credit expansion does not stall while sustaining FX stability. Beyond short-term interventions, long-term Naira stability hinges on structural reforms—diversifying forex inflows, and strengthening industrial capacity. Without these measures, macroeconomic stability remains fragile”, they added.
