Investing in the Nigerian stock market can be a lucrative venture, especially when you have a substantial amount to start with. In July 2024, there are several promising Nigerian stocks you can invest in, if you have N2 million.
This guide will provide you with insights into the best stocks to consider, offering a diversified portfolio to maximize your returns. Whether you're a seasoned investor or new to the stock market, our expert recommendations will help you make informed decisions and grow your wealth.
Nigerian Stocks you can Invest in, if you have N2 Million
The Nigerian Exchange (NGX) Limited All-Share Index (ASI) closed at 74,773.77 points on Friday, December 29, 2023, indicating a 45.9% increase from the previous year’s index of 51,251.06 points.
The positive sentiment in the market can be attributed to favourable policies implemented by President Bola Tinubu’s administration, alongside strong market performance. Increased buying pressure in key sectors such as Oil and Gas, Telecommunications, and Industrial Goods, has sparked optimism and investor confidence.
Despite challenges such as the Central Bank’s interest rate hike and rising inflation, the market has exhibited resilience, which is expected to further fuel growth with the conclusion of the 2023 elections and improved domestic and foreign investor sentiment.
Although the investment forecast for 2024 appears positive, it is important for investors to exercise caution. To maximize returns and minimize risk, investors should prioritize selecting companies with strong financial performance, leadership, and growth potential based on fundamentals.
It is also recommended to diversify investments across various sectors and asset classes and actively manage the portfolio by continuously monitoring holdings and adjusting positions according to market conditions.
In addition, investment analysts recommend investing in the oil and gas sector, industrial goods sector, consumer goods sector, and telecommunications sector in 2024.
Based on their analysis, these industries are predicted to perform strongly as they generate higher income and profits, resulting in increased returns on investment and greater dividends for shareholders.
The analysts have observed that as the share prices for most of the companies listed on the Exchange are currently low, this makes them more appealing and therefore presents an opportune time for investors to purchase these stocks in order to benefit from potential higher returns.
The investment experts have provided a list of recommended stocks for an N2 million investment at present. In an exclusive interview with Nairametrics, Managing Director of Crane Securities Limited, Mr. Mike Eze, discussed important factors to consider when investing in the Nigerian capital market.
Mr. Eze highlighted the four pillars that guide investment decisions: return on investment (capital gain), dividend payout, bonus issue, and stability of capital. He cautioned against investing solely in high-priced equities and stressed the importance of understanding individual investment goals.
Mr. Eze differentiated between strategies for capital gains and income-oriented investors, noting that dividend payouts and bonus issues require a patient investment horizon, while capital gains can potentially be realized sooner.
Mr. Eze acknowledged the current state of the market and mentioned that investing in many bank stocks might not provide short-term returns due to their high prices. Unless these stocks decrease in value before the year’s end, investors won’t see significant profits.
Instead, he recommended buying shares in companies like BUA Foods Plc, Dangote Sugar Plc, PZ Cussons Plc, Unilever Plc, MTNN Plc, Total Energies Plc, Seplat Energy Plc, BUA Cement Plc, and Julius Berger Plc at the start of 2024 since they still have the potential for price increase and capital gain.
Mr. Olatunde Amolegbe, the MD of Arthur Steven Asset Management Limited, agrees on the promising nature of the oil and gas and telecommunications sectors. He also shared his perspective on specific stock picks with Nairametrics.
According to the investment analyst, Seplat Energies Plc (SEPLAT) and TotalEnergies Plc (TOTAL) are attractive options in the oil and gas sector due to SEPLAT’s excellent exploration and production record, and TOTAL’s diverse Nigerian operations offering stability and growth potential.
Meanwhile, MTN Nigeria Plc (MTN) is a compelling choice in the telecommunications sector due to its dominant market position, large subscriber base, and continuous investments in technology, making it a prime beneficiary of Nigeria’s booming telecoms market.
The analyst emphasized that these stocks are still highly attractive and have the potential to increase in price, providing investors with capital gains. Furthermore, these companies have a proven track record of consistent dividend payments, making them suitable for generating passive income.
However, the analyst advises that thorough research and careful consideration should be taken before investing in dividend-paying stocks.
Mr. Amolegbe advises investors to exercise caution when considering dividend-paying stocks and to thoroughly research a company’s financial health, dividend payout history, and sustainability before making decisions based solely on dividend yields.
Meanwhile, Mr. David Adonri of Hicap Securities Limited highlights the potential growth of telecoms giants such as MTN Nigeria Plc and recommends industrial sector stocks like Dangote Cement, Lafarge Cement, and BUA Cement due to their strong earnings potential in the final quarter driven by increased construction activity and rising demand for cement.
Though dividend yield in the telecoms industry may pale in comparison to the banking sector, stocks like MTNN and Airtel offer growth potential, making these stocks attractive options for investors seeking both income and capital appreciation.
It is important to keep in mind that investing comes with certain risks, so it is necessary to think carefully before making any decisions. Seeking advice from a financial advisor can be helpful in making informed investment choices, meeting your financial objectives, and ensuring a better financial future.
By comprehending lucrative sectors, conducting extensive research, and using careful risk management approaches, investors can successfully explore the promising investment opportunities available. Knowledge is a valuable asset in the market and it should be utilized to make sensible judgments and unlock the full potential of investments in 2024.
The Takeaway
In conclusion, investing in Nigerian stocks with N2 million in July 2024 presents a valuable opportunity to diversify your portfolio and achieve substantial returns. By focusing on well-researched and high-potential stocks, you can navigate the Nigerian stock market with confidence.
Remember, successful investing requires patience, research, and strategic planning. Utilize the insights provided in this guide to make the most of your investment and watch your wealth grow in the dynamic Nigerian economy.
I Am odudu abasi a top-notch and experienced freelance writer, virtual assistant, graphics designer and a computer techie who is adept in content writing, copywriting, article writing, academic writing, journal writing, blog posts, seminar presentations, SEO contents, proofreading, plagiarism/AI checking, editing webpage contents/write-ups and WordPress management.
My work mantra is: “I can, and I will”
The content is intended to augment, not replace, information provided by your clinician. It is not intended nor implied to be a substitute for professional medical advice. Reading this information does not create or replace a doctor-patient relationship or consultation. If required, please contact your doctor or other health care provider to assist you to interpret any of this information, or in applying the information to your individual needs.