Business
Financial Experts Express Mixed Reactions Over Stocks Rally
Some financial experts have expressed mixed reactions to the bullish trend witnessed by the Nigerian stock in the past three weeks.
They told The Tide source in Lagos, Wednesday, that the bullish trend could be achieved with increase in oil price and increased output. The Head of Banking and Finance Department, Nasarawa State University, Keffi, Dr Uche Uwaleke, said that the bullish trend in the stock market would be sustained, as long as crude oil price and output continue to rise. Uwaleke said that the downside risks for the market remained the renewed threat of attack on oil facilities by Niger Delta militants.
He said that the delay in implementation of the 2018 budget was another factor that could affect market growth and development.
Uwaleke attributed the uptrend in the equities market, primarily driven by positive investors’ sentiments to the optimism concerning the Nigerian economy.
He said that the International Monetary Fund (IMF) and the World Bank forecasts of real Gross Domestic Product (GDP) growth rate for Nigeria in 2018, at 2.1 and 2.5 per cent respectively, contributed to investors’ renewed interest in the market.
The lecturer said that another factor responsible for the remarkable year-to-date performance of stock market was the decline in money market rates.
He said that the decline in money market rates made the equities market attractive to pension funds and other institutional investors. Mr Bayo Adeleke, the immediate past Secretary, the Independent Shareholders Association of Nigeria, said that the market trend was not sustainable. Adeleke urged investors to invest with caution to avoid burning their hands.
“The trend is not sustainable. We are approaching an election year. Foreign investors will enter very cautious mode by third and fourth quarters of the year,’’ he said The Tide source reports that the market capitalisation of the Nigerian Stock Exchange (NSE), which opened for the year at N13.609 trillion, rose by N2.55 trillion or 18.70 per cent, to close trading on January 19 at N16.154 trillion. Also, the All-Share Index, which opened for the year at 38,243.19, inched 6,849.64 points or 18 per cent, to close trading on January 19 at 45,092.83.
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