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.