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Financial experts are recommending specific penny stocks for potentially significant gains in 2024. As the new year unfolds, these experts are identifying opportunities in the market that could lead to substantial returns for investors.
The Nigerian Exchange Limited (NGX) closed the year 2023 on a positive note, driven by a resurgence of investor confidence in listed companies.
This positive momentum has fueled optimism for a potentially bullish market in 2024, with the equities index nearing the 80,000-point mark.
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While adopting a cautious approach in the near term remains advisable due to market dynamics, analysts suggest that select penny stocks could present attractive entry points for discerning investors seeking capital appreciation.
However, they emphasize the importance of conducting careful research and implementing effective risk management strategies when considering investments in such stocks.
In an exclusive chat with Nairametrics, investment analysts recommend focusing on penny stocks with robust fundamentals and a history of consistent dividend payments.
They believe that such stocks have the potential to deliver good returns on investment, primarily through share price appreciation in the medium term. Notable examples highlighted by analysts include Sterling Bank, FCMB, Wapic Insurance, Jaiz Bank, AIICO, FTN Cocoa, Chams, Japaul Gold, Universal Insurance, Royal Exchange, and Verita Kapital.
Managing Director of Crane Securities Limited, Mr. Mike Eze, notes that during bullish market phases, investors tend to shift from overvalued stocks nearing their peaks to sectors with relatively lower prices.
He draws parallels to a market boom two decades ago, where investors explored diverse sectors, and astute players identified value in penny stocks. Mr. Eze advises caution against generalizations, emphasizing the need for careful analysis, due diligence, and a focus on penny stocks with strong underlying fundamentals and growth potential.
Victor Chiazor, Analyst and Head of Research at FSL Securities Limited, projects a potential normalization in response to recent government policy statements in 2024.
He suggests that the equities market will be influenced by both company performance and the implementation of new pro-market policies. Chiazor advises caution as the second quarter approaches and anticipates a shift towards investments in penny stocks.
Kasimu Garba Kurfi, the Managing Director/CEO at APT Securities and Funds Limited, highlights the potential significance of penny stocks and small-cap investments in 2024 for capital gain and share appreciation.
He notes the impending need for capitalization in the banking sector, impacting its performance throughout the year. Recommended penny stocks include AIICO, FTN Cocoa, Chams, Japaul Gold, Universal Insurance, Royal Exchange, and Verita Kapital.
David Adonri, Executive Vice Chairman of Hicap Securities Limited, acknowledges the challenge of finding penny stocks with solid fundamentals amid the sustained bull run across the market. He emphasizes that investors prioritizing safety, liquidity, and profitability can achieve their investment objectives through stock, regardless of their capitalization status.
Investors are reminded that investing involves inherent risks, and careful consideration is essential before making any decisions. Consulting with a financial advisor can provide valuable insights and guidance for making informed investment decisions.
By understanding promising sectors, conducting diligent research, and employing prudent risk management strategies, investors can navigate potential opportunities in the market in the coming year.
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