Financial analysts at Partnership Investment Company Plc have envisaged a mild profit-taking by investors in the equities market following the significant growth recorded in share prices in recent weeks.
After closing 2012 with the growth of 34.5 per cent, the stock market has opened 2013 with a positive outlook, recording 2.41 per cent growth in the first week of the year.
Although the positive trend is expected to continue, analysts at Partnership Investment Company Plc said investors would embark on profit-taking to lock in some of the gains of the last weeks of last year.
In their weekly review of the financial sector and economy, made available to THISDAY, the analysts noted that the positive trend would continue.
“However, mild profit-taking is expected in the coming week but we do not envisage this distorting current trend,” they said.
Speaking on the investment strategy to adopt, the analysts advised that investors should diversify across different investment securities available in the Nigerian capital market, while also investing in equities with strong fundamentals.
This, they stressed, should be guided by investors’ risk appetite and investment expectations.
In their own advice, analysts at FSDH Securities Limited, said equities market could prove to be a worthwhile investment due to low rate on government securities.
“As government securities are currently experiencing a low rate regime, the equities market could prove to be a worthwhile investment. Investor confidence has gradually been restored with the impressive market return in 2012, which could lead to increased participation and opportunities going forward,” they said.
The first week of 2013 saw some equities appreciate significantly. For instance, First City Monument Bank Plc rose by 36 per cent last week, while Presco Plc appreciated by 26 per cent. Skye Bank Plc also fetched a capital gain of 20 per cent for investors.
Operators and investors are optimistic that the bulls would remain in control of the market for some time as full year financial results of companies and banks are being expected.