Operators hopeful of increased market activities

•Experts urge investors to expand portfolios

Hopes of increased stock market activities and sustainable rebound rose with the inauguration of ministers, yesterday, as operators urged investors to increase their participation in the market.

Capital market analysts who anticipated a major resurgence under the current administration to make up for the poor performance of the immediate past administration argued that despite the instability that pervaded the nation’s capital market in the past few years, there is a need for investors to leverage the current low prices to expand their portfolio for future capital appreciation.

Although they admitted that the current weak macro environment remains a significant headwind, they expressed optimism that the swearing-in would serve as a momentum booster.

They added that the nation’s soaring inflation is a potent threat to the fixed-income market and investment yields, an indication that more funds will flow into the equity space as institutional investors balance their portfolios.

For July 2023, the headline inflation rate surged to 24.08 per cent, s sharp increase from 22.79 per cent printed in June.

Chief Operating Officer of InvestData Securities Limited, Ambrose Omordion, stressed the need for retail investors to increase their portfolios and take positions for future gains.

He also advised investors not to panic but increase their stake in equities with intrinsic value.

According to him, with more investors taking positions in value and dividend-paying stocks, it is expected that the continued mixed direction of the fixed-income market yields and treasury bill rates will continue to support the flow of funds into the stock market.

“Investors should not panic. With the swearing-in of ministers today and with the first Federal Executive Council (FEC) meeting to be held this week, we expect to see increased activities in the market as these ministers start rolling out their plans for the future.

“I believe the coordinating minister for the economy will put the economy on the right track and ensure that the immediate plan will be to address the issue of forex and when this is done, foreign investors will return to the market,” he said.

Managing Director of Crane Securities Limited, Mike Ezeh, said because the stock market is information-driven, the swearing-in is expected to spur activities in the market.

“The market is information driven and swearing in of ministers and of course who takes on the finance ministry and who becomes in charge of the economy all price sensitive information that should drive the market.

“And now, the Minister for Finance and the Coordinating Minister for the economy is from the capital market and a stock broker. This information alone will drive the market positively,” he said.

According to him, investors should look at the banking sector because the banks have been assessed as a lucrative sector of the economy and the performance has remained on an upward trajectory over the years.

In addition, he recommended the oil and gas sector, noting that key reforms that have taken place in the sector are expected to have ripple effects on the stocks going forward.

He added that the stock market remains a veritable area of investment but with cautious optimism.

Chief Executive Officer of Wyoming Capital and Partners, Tajudeen Olayinka, said: “Current stock prices already reflect current cabinet formation. I advise that investors should shift focus to some promising sectors like banking, telecoms, oil and gas, cement, industrial goods and consumer goods because of possible positive impacts of the ongoing economic reforms on these sectors.”