Can Nigeria’s equities rally be sustained?

The Nigerian equities market remained relatively unchanged after a 3.4% weekly gain last week, with the NGX All Share Index gaining a marginal 2 basis points. Despite the market's stability, the oil and gas index and the banking sectors were the biggest gainers today, showcasing positive momentum in these key sectors. Oluwaseun Dosunmu, Head of Investment Research at Parthian Securities, highlighted the factors shaping sentiments in Nigeria's equity space in a recent interview on CNBC Africa. Dosunmu expressed optimism about the market's outlook, citing key drivers such as positive momentum at the start of the year and investors positioning ahead of Q4 earnings reports. He emphasized the significance of companies that pay dividends and projected a positive trend in the market as more earnings are released. Dosunmu also discussed the monetary policy committee decision and its impact on the market, expecting the Central Bank of Nigeria to hold rates steady to stimulate economic growth. In terms of sector expectations, Dosunmu shared insights on the banking sector's adoption of the holding company structure and positive outlook for the oil and gas sector driven by rising crude oil prices. The correlation between crude oil prices and the equities market was highlighted, indicating a favorable outlook if the positive momentum continues. Dosunmu's analysis pointed towards a sustained momentum in Nigeria's equities market, with key sectors poised for growth despite market uncertainties. Investors are advised to remain vigilant and strategic in their investment decisions to leverage the potential opportunities in the evolving market landscape.