Indigenous interdealer brokerage firm, Parthian Partners, has projected that the Nigerian National Petroleum Corporation Limited and Dangote Refinery would be listed on the Nigerian capital market in 2024.
This projection was revealed on Tuesday as the company
launched its 2024 Economic Outlook titled ‘Equities Market Frothiness:
Navigating the Thin Ice.’
In its projection presented by the head of investment
research, Oluwaseun Dosunmu, Parthian Securities said that in the coming year, it expects a
“High-interest rate environment, recapitalisation of the banking industry,
capital raising by some listed companies, mergers and acquisitions in the
banking industry, prospective energy capacity increase as well as the likely
listing of Dangote Foods, Dangote Refinery and NNPC Limited.”
Meanwhile, the Managing Director/ Chief Executive Officer of
Financial Derivatives Company Limited, Bismarck Rewane, in his presentation at
the launch of the Outlook spoke on the impact of the Dangote Refinery on the
economy.
Rewane, who is also a non-executive director, Parthian
Partners, stated that alongside AFCFTA, and road concessions, the Dangote
Refinery was going to be a game-changer in the coming year.
He said, “There are three things that are going to change
the game, one of them is the Dangote Refinery. The outlook is already showing
that but there is a lot of misconception and myths about the refinery.
“The Dangote refinery will not change the foreign exchange
position. The oil that is being refined is oil that would have been sold to
earn foreign exchange. Right now, what happens is we send 500,000 barrels of
oil to Rotterdam, and someone refines it and brings it back but the landing
cost is higher than the selling price, so there is a subsidy. The only way to
look at it is simple. It is to ask yourself, ‘What is the price of diesel? It
is over N1,000 per litre, the price of PMS is about N617 per litre, and the
difference between the two is about N500. Secondly, we’re told that we consume
about 60 million litres a day, which is not correct. With Dangote Refinery,
there will be guaranteed supply, and there will be quality but there will be no
effect on forex and the price of PMS.”
Rewane also projected that the Nigerian Naira which has been
taking a beating at the foreign exchange market will stabilise and appreciate
in 2024, saying, “We believe that the currency will begin to appreciate
sometime as we go into 2024. Some of you will say, what’s this guy smoking or
how much has been given to him to come and say this? The currency will
stabilise and then begin to appreciate in a few months.”
Parthian Partners also presented two scenarios that may
affect the Nigerian Exchange Limited if either a bullish or bearish sentiment
rules the market in 2024.
On the bullish scenario, the investment firm revealed that
the benchmark of the market, the All-Share Index may appreciate above 75,000
points on the back of bank and insurance recapitalisations, likely an increase
in foreign investor participation and pro-market policies.
However, if the bears have the run of the market, the ASI is
likely to plummet below 70,000 points driven by continued foreign exchange
depreciation, high-interest rates, weak corporate earnings, poor policy
implementation and anti-market policies.
In conclusion, the firm said, “An uncertain backdrop does
not mean a dearth of opportunity.” Some of the opportunities highlighted by the
firm include commodities-linked notes, equity mutual funds, banking, healthcare
and industrial goods sector and short selling.
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