Goddy Egene
Having recorded its first monthly gain in March, some market analysts have expressed optimism that the Nigerian equities market would sustain the positive performance in April.
The Nigerian Stock Exchange (NSE) All-Share Index, which is the benchmark gauge for measuring the performance of the equities market gained 0.74 per cent in March, compared with negative performance in January and February.
Reviewing the performance of the market for the month of March, analysts at Cordros Capital Limited, said improvement recorded last month would be sustained in April.
“We expect the current improvement – albeit modest – in the macroeconomic environment, especially the currency space, will further stoke investor appetite, particularly in the event of no negative surprise(s). Better-than-expected first quarter results (we expect a few top names to announce results before the end of the month) may act as catalyst,” they said.
According to analysts, the 0.74 per cent recorded last month was party driven by a mix of positive economic and corporate news, saying the growth would have been higher but for sell off in the first half of the month.
“The rebound, which could have been stronger, save for the selloff in the first half of the month, on the domestic bourse was primarily driven by a mix of positive economic and corporate news. Recall that we had guided to the potential impact of better-than-expected fourth quarter (Q4) earnings and significant improvement in the Naira exchange rate in our review of markets in the month of February,” they said.
The analysts explained that specifically, a number of manufacturing companies (Lafarge, Dangote Cement, Cement Company of Northern Nigeria, Unilever, and Cadbury), released their full year 2016 results, and surprised investors with massive upturns (compared to Q3) in their final quarter performances.
“On the economic front, investors found respite in the less-apprehensive macro space. Indeed, risky assets benefitted from a confluence of positive events ranging from: the release of Nigeria’s Economic Recovery and Growth Plan by the Ministry of Budget and National Planning; a moderation in February inflation rate (to 17.78 per cent, from 18.72 per cent); steady accretion to the foreign reserves, which averaged $30 billion during the month; the naira strengthening to record-high (N375/United States dollar) in the parallel market,” they said.
