6 January 2013

Nigeria: Banking, Consumables, Beverages Stocks to Dominate Market This Year - Operators

Some capital market operators said yesterday tactivities in the Nigerian Stock Exchange (NSE) in 2013 will be dominated by the banking, consumer goods, food/beverages, and building material stocks.

They told the News Agency of Nigeria (NAN) in Lagos that the market will continue on its recovery path in 2013 barring any unforeseen economic shocks.

Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said the banking sector will lead activities in the year as a result of financial sector reforms.

Kurfi said the reforms have impacted positively on the fortunes of the industry and investors made over 55 percent returns in the sector in 2012.

"We are still expecting it to do more because most of the banking stocks are still trading below their fair value and very liquid for both entry and exit of foreign investors," he said.

Kurfi, however, called on market regulators to embark on aggressive investor education to increase local investor participation in the market which currently stands at 30 percent.

Mr Emeka Madubuike, the Managing Director, Compass Securities Ltd., said that the construction sector and food/beverages stocks will experience increased activity due to the country's large population.

"The food/beverages, building materials and oil/gas sectors will do well because we are still a developing economy with large population," Madubuike said.

He urged the federal government and market regulators to provide the right environment for investment purposes.

Madubuike said local investors need to be educated on market investment options, exit arrangement and when and where to invest to avoid repeat of past experiences.

Mr Harrison Owoh, the Managing Director, HJ Trust and Investment Ltd., called for provision of more incentives by both government and market regulators to attract listing of more companies on the exchange.

"The federal government needs to list all its privatised companies in the power sector and oil/gas to increase the depth of the market," he said.

The Nigerian Stock Exchange All-Share Index grew by 35.45 percent or 7,348.18 points in 2012 to close the year at 28,078.81 from 20,730.63 recorded in 2011.

Also, the market capitalisation grew by N2.4 trillion to close at N8.97 trillion on Dec.31, 2012 up from the N6.53 trillion at which it opened in January 2012.

By the performance, the nation's bourse has been ranked as third performing stock exchange in Africa.

Egypt leads other African markets with 49.56 percent on year-to-date return.

It is followed by Kenya with 39.32 percent growth rate.

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