Is It Still Time to Buy?


Wednesday, October 5, 2017 11:19AM/ Capital Bancorp Research 

The equities market has returned a year to date (YTD) performance of 31.57% on the back of improved interest in the equities market and renewed confidence in the Nigerian economy. 

Most of the factors responsible for this improvement remain the constant improvement and stability in global oil prices, relative peace in the Niger delta region as the country continues to pump above 1.8 million barrels per day, continuous accrual to the country’s reserve which is currently at an approximate 32 months high, the increased FX liquidity which has somewhat stabilized the exchange rate and the improved earnings performance of listed companies amongst other factors. 

Going forward, we are of the view that despite the significant improvement in the equities market, there remains significant upside potential for a number of stocks listed on the equities market and we believe that fund flow towards the equities market remains imminent given the significant decline in rates on government securities which has dropped from a high of about 18.7411% in April 2017 representing a yield of approximately 22.30% down to an interest rate of 15.7253% representing a yield of approximately 17.95% and is projected to dropped further given the improved revenue generating capacity of the Nigerian Government. Furthermore, most of the securities in the equities market have returned significantly higher returns compared to yields gotten in the fixed income market (Though we advise professional investment counsel before investing in equities market as downside risk remain). 

In summary, we suggest that the time is now for investors willing to invest in the equities market as those that invested at the beginning of the year have benefited hugely given the market performance for the year 2017. Kindly find below the top 25 gainers and losers in the equities market year to date (YTD) as well as our stock recommendation.

Proshare Nigeria Pvt. Ltd.

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