Capital market analysts and operators have said they are optimistic that the growth witnessed in the market in the last two years will be sustained in 2014.
Thank you for reading this post, don't forget to subscribe!Some of the reasons they gave for the positive outlook are the returning stability to the global economic scene, strong fundamentals by top listed firms and better regulation of the capital market.
Several operators are of the view that the market is better structured and positioned to handle surges in activities with operators more professional in their dealings. And they believe that these developments are vital to sustained growth.
“From the professional point of view, the outlook is positive,” the Chief Executive Officer, Trust Yield Securities, Alhaji Ola Yussuf, said.
According to him, this is partly because a number of new products, some of which were designed in 2012 and 2013, are expected to come on stream this year and attract more investments.
Yussuf explained that the impact of the two over-the-counter platforms – the NASD OTC and the FMDQ OTC – introduced in 2013 would also be felt.
Both platforms deal with unquoted securities and Yussuf is of the view that the more people patronise them, the more the stocks that are traded there will end up on the NSE.
He said, “From our own perspective, 2014 is expected to be a more vibrant year; a year that new grounds will be broken in the market and when the development you are witnessing in the market will become more entrenched and the recovery will be fully manifested.”
Analysts at Meristem Securities Limited have a similar view.
In their latest investment guide, they wrote, “With recovery in the global economy in sight, modest equities valuation, sustained attractiveness of the domestic economy, though, tainted with pockets of domestic political concerns, we expect positive returns in the equities market in 2014.”
The stock market had made a 47.19 per cent return in 2013 driven by earnings and developments in the global economic scene as well as strong returns by several sectors. In their sectoral projections for 2014, the Meristem analysts were mostly upbeat.
For instance, though they observed that the oil and gas sector recorded a turnover decline of 5.6 per cent compared with 10.6 per cent growth in 2012, their forecast earnings growth for 2014 is 32 per cent.
They explained that they expected much better corporate scorecards because key players were now focused on deepening non-regulated petroleum products.
The President, Association of Stockbroking Houses of Nigeria, Mr. Emeka Madubike, was also optimistic that the market had been positioned to sustain the growth witnessed in the last two years.
He, however, stressed that for there to be continued growth, the market had to be stable.
He said, “Provided we do not have a policy that would distort the market, the growth witnessed would be sustained.
“The market needs stability. And so, we hope that there would be no policy from the government or government agencies, and the regulators that will cause any upheaval in the market.”
