Business

2022: Another lacklustre year on NGX -Agusto & Co

● Banking profits to remain weak on cash reserves

 

OUTLOOK

The financial services sector will continue to hurt largely due to negative regulations

 

Agusto & Co., one of the leading rating agencies in the country, has projected that weak performance by quoted companies and apathy by foreign investors towards the Nigerian stock market mean another lacklustre year on the Nigerian Exchange Limited (NGX).

 

The rating agency stated this at its virtual seminar titled: “Nigeria in 2022 – Will 2022 be a year of strong growth driven by herd immunity from COVID-19?”

 

The seminar, which was facilitated by Mr. Olabode Agusto, founder Agusto & Co/ Agusto Consulting, was in commemoration of its 30th anniversary.

Agusto, in a presentation, also noted that banking industry profitability would remain weak because of a high level on non-earning cash reserves, continuation of the AMCON levy beyond the ten years initially agreed and higher effective tax rate.

“We project real GDP growth of three to four per cent in 2022 driven largely by the services, manufacturing and oil and gas  sectors. The financial services sector will continue to hurt largely due to negative regulations – above normal CRR and negative real interest rates,” he said.

He noted that after-tax return on equity (ROE) across most industries would remain weak and below the cost of equity, which “we estimate at around 27 per cent for 2022. “However, key businesses in the real sector should deliver ROE that is above average inflation of about 15 per cent in 2022.

Financial services businesses will struggle to meet this hurdle rate largely due to negative regulations and a higher effective tax rate. “In 2022, businesses will need to grow their nominal sales by about 15 per cent to keep pace with inflation.

 

This will be difficult for most as the real wages of consumers are unlikely to keep pace with inflation.

“In 2022, businesses and households in Nigeria will fare slightly better than they did in 2021 as the World recovers from COVID-19.

 

“However, Returns delivered by key businesses will still be below the expected return (cost of equity), which we estimate at about 27 per cent for Nigeria.

“This, in addition to foreign exchange policies that are unattractive to investors, will impact the valuation of these businesses adversely.

 

Real GDP per person will still be below what was recorded in 2015. Real wages will continue to drop and unemployment will keep rising,” he said.

 

TRY IT TONIGHT!!! ---

 

Abuja Civil Servant reveals (FREE) secret Fruits that Increased his Manh0d size, gives Stronger Erections and ends Premature Erection in 7days...

   

CLICK HERE FOR FULL DETAILS.

 

%d bloggers like this:
Fake Richard Mille Replica Watches, www.richardmille.to The ceramic upper and lower cases are imported from Taiwan and are processed by ATPT ceramics to form Y-TZP ceramics. After high-tech anti-fingerprint technology, they present a delicate and soft sub-black material. This color quality has remained unchanged for a hundred years. The color and luster are more detailed to achieve the ceramic tone visual pattern electroplating upper and lower shells that are infinitely close to the original products, with anti-reflective coating sapphire glass! The tape uses a soft and delicate Malaysian imported top rubber strap, and the movement is equipped with an imported Seiko NH movement. The buckle of this version is made according to the original size and thinness, making it feel more comfortable and intimate, the highest version on the market Richard Mille Replica