Financial experts have expressed confidence that stock market would rebound in the second half of the year due to the implementation of the 2018 budget.
They told news reporters in separate interviews in Lagos state, South-Western Nigeria, that prompt implementation of the budget signed by the Nigerian President in June would boost the performance of the stock market.
Prof. Sheriffdeen Tella of the Economics department, Olabisi Onabanjo University, Ago-Iwoye, Ogun state, said the implementation of the budget would improve stock market activities in the second half of the year.
Tella said, “Federal spending has a way of jump-starting the economy which is largely public sector-dependent.”
According to him, the banking and manufacturing sectors will likely dominate activities during the period.
“If manufacturing picks up in output and capacity utilization resulting in employment, the sector might rival the banking sector.
“Reforms in the South African investment environment and that of Nigeria can improve public confidence in the markets and encourage new firms entering the market as well as new investors.
“However, the outcome may be delayed to the last quarter of the year as investors are always cautious because the stock market is unpredictable,” Tella said.
Also speaking, Malam Garba Kurfi, the Managing Director, APT Securities and Funds, said the stock market would do better in the second half of the year with the increase in foreign reserves.
Kurfi said the increase in foreign reserves, foreign exchange stability and rise in the price of crude oil would likely attract foreign investors to the market.
He added that the review of the funds structure by PENCOM would increase the participation of Pension Fund Administrators in the capital market.
Kurfi also said the reversed trading policy of the Nigerian Stock Exchange (NSE) would bring new prices and more activities in the market as most stocks were trading below their fair prices, especially the tier one banks; this would attract institutional investors into the market.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., urged traders and investors to take advantage of low equities prices and position in some sectors for medium to long-term gains.
Omordion called on them to position in industrial goods, banking, agriculture, consumer goods and insurance stocks with good fundamentals.