Capital market operators predict positive performance in 2020

Capital market operators have expressed optimism that the nation’s bourse will witness positive performance in 2020 due to low interest rate in money market instrument and early passage of the budget. They stated this in separate interviews with the News Agency of Nigeria (NAN) in Lagos yesterday, while reacting to the stock market expectations in 2020.

Chief Executive Officer, InvestData Ltd., Ambrose Omordion, said low interest rate regime, increased credit to the real sector and early assent of the 2020 budget would impact positively on the market.

“The market in 2020 looks promising as factors that will shape the economy and stock market are on the increase, in spite of the continuous downgrade by rating agencies,” Omordion said.He stated that early implementation of capital expenditure would have multiplier effect on the economy.

According to him, regulatory initiatives and policies such as the Central Bank of Nigeria (CBN) Treasury Bills (TBs) and Open Market Operation (OMO) restrictions will encourage local and institutional investors’ sentiment to the equity market.He noted that the exchange new free float rule expected to commence on Jan. 2, 2020 would improve market liquidity and transparency, thereby impacting positively on the market.

On sectors to watch out in 2020, Omordion said that financial, consumer goods, building materials, telecomms/ICT would be the most sought by investors.“The financial sector is more marketable, consistent in dividend payout and if the economy finds its feet in 2020, the banks will benefit more,” Omordion said.

He noted that low price attraction of consumer goods stocks due to huge losses suffered in 2019 would make the sector attractive, adding that low interest rate on consumption would boost industry earnings, while mobile licence would boost telecomms sector’s profitability. Managing Director, APT Securities and Funds Ltd., Garba Kurfi, said 2020 would be a better year for the Nigerian stock market, insisting that 2018 and 2019 recorded loss in two digits of 18 per cent and 16 per cent and a decline of 34 per cent.

“The crash of interest rate in the money market instrument from 15 per cent to about seven per cent or less makes money market returns negative compared with inflation of about 12 per cent,” he said.On his part, National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, said that stock market performance would be determined by the nation’s economic activities.

He urged economic managers to pursue friendly policies to boost investors’ confidence in the stock market and economy in general, adding that price of oil in the international market, security situation and obedience of rule of law would shape stock market activities in the year.

While advising government improve its adherence to the rule of law to attract foreign investors into the country, he also urged government to address multiple-tax regime that affects development of the country’s manufacturing sector.