09 July 2014, Abuja – Managing Director of Financial Derivatives Company Limited, Mr Bismark Rewane, has predicted that the growth in the capital market will continue in the third quarter of this year.
Rewane who made this known while presented a paper at the Lagos Business School (LBS), added that growth on the exchange will be further driven by the consumer and financial service sectors.
Contrary to speculations, he said no pleasant surprise is expected in second quarter earnings releases.
He stated that foreign investors will return cautiously to Nigerian equities, adding however that the stock market will be driven by domestic investors.
On the perceived risk I the market, he said the entire finance sector remains stable and may hold hidden value.
He said: “The Nigerian Stock Exchange (NSE) banking index is down by 3.5 per cent but continue to improve. Consumer goods have been limited by waning demand and rising costs. However, fast moving consumer goods continue to invest in capacity and efficiency. Return in demand should precede sector’s rebound.”
While reviewing activities of foreign investors in the NSE, he said foreign investors remain cautious, maintaining a wait-and-see approach.
According to him, “foreign share of transactions on the NSE went down to 45.25 per cent in May from 75.25 per cent in April. Local currency and social woes give foreign investors cause for concern, foreign transactions down to N92 billion in May from N136 billion in February this year.
Domestic investors are however picking up the slack.”
The Nigerian equities market returned a margin 2.8 per cent in H1, which improved to 4.2 per cent last Friday. The growth in H1 was boosted by some individual stocks such as Forte Oil Plc, Custodian and Allied Insurance Plc and HIS Plc.
Such stocks recorded growth ranging from 111 per cent to 30 per cent in the first six months of the year. Forte Oil Plc led top gainers for the period with 111 per cent.
Forte Oil had similarly posted the highest growth in 2013, fetching investors over 1,164 per cent gain. The NSE last week included Forte Oil on the list of its high priced stocks.
Justifying the inclusion, NSE had explained that a review of trading activities of the company in the last six months showed that the company met the criteria set by the exchange, which including trading above N100 for certain period of time.
Meanwhile, Custodian and Allied Insurance Plc closed as the second highest price gainer for the period, rising by 77 per cent. Trans-nationwide Express Plc returned 76.9 per cent.
IHS Plc, which is planning to delist recorded 40.7 per cent growth, while Ashaka Cement, Cadbury Nigeria Plc and Union Dicon Salt Plc chalked up 35.8 per cent, 35.6 per cent and 35 per cent respectively. Seven-Up Bottling Company went up 30.2 per cent among others.
– This Day