NSE Indices: Expert Predicts Lower Growth

The Managing Director of
Financial Derivatives Company Ltd., Mr Bismarck Rewane, has predicted a lower growth in the Nigerian Stock Exchange market capitalisation in 2014.
Rewane made the projection at an Investors’ Forum 2014, organised by Investment One Financial Services Ltd. in Lagos.
He said that the market capitalisation would appreciate by about 28 per cent against the 47.49 per cent posted in 2013.
According to him, foreign direct investment, which used to boost activities on the NSE would decline in 2014 as the U.S. winds down quantitative easing.
He said that the Monetary Policy Committee’s adjustments would lead to higher interest rates and depreciation of the naira in all markets and a reduction in savings for investment purposes.
Rewane said that other factors that could affect investment in the year under review would include increased government spending ahead of the 2015 elections, decline in oil revenue, insecurity, high unemployment and high income inequality.
He said that the review in Cash Reserve Requirement on public sector funds would affect banks’ profitability, as N750 billion of broad money supply would be quarantined from the banking industry.
Rewane also allayed investors’ fears of possible market meltdown, stressing that government had introduced special vehicle like AMCON to avert a repeat of the 2008 experience.
He urged investors to invest in companies’ with strong fundamentals, adding that insurance, building materials and banking sectors would dominate activities in 2014.
Speaking also, NSE’s Executive Director of Market Operations & Technology, Mr Ade Bajomo, said that the Nigerian capital market emerged as the second largest market in Africa in 2013.
Bajomo canvassed the need to transform the market from a frontier market to an emerging market.
He said that market indices showed great growth prospects for businesses in sub-Saharan Africa.
Bajomo said that the NSE would leverage on increasing business growth and become more globally competitive in wealth creation in 2014.