…As Kurfi says Nigeria stock market will witness double digit growth in 2020***
The market indicators of the Nigerian Stock Exchange (NSE) closed marginally on Wednesday with a growth of N3 billion or 0.02 per cent.
Specifically, the All-Share Index (ASI) rose by 6.53 points or 0.02 per cent to 27,878.43 against 27,871.90 recorded on Tuesday.
Also, the market capitalisation increased by three billion naira to N14.519 trillion in contrast with N14.516 trillion.
The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; CI Leasing, UACN, Access Bank, Lafarge Africa and Africa Prudential.
Analysts at Afrinvest Limited stated that “Despite today’s slight gain, we maintain a bearish outlook on the market due to waning investor sentiment.”
Africa Prudential recorded the highest price gain in percentage terms with 2.17 per cent, to close at N4.70 per share.
UACN followed with a gain 2.15 per cent to close at N9.50, while Access Bank appreciated by 2.08 per cent to close at N9.80 per share.
United Bank for Africa rose by 1.95 per cent to close at N7.85, while Nigerian Aviation Handling Company (NAHCO) appreciated by 1.46 per cent, to close at N2.78 per share.
Conversely, Vitafoam Nigeria led the losers’ chart in percentage terms, dropping by 9.94 per cent to close at N4.53 per share.
Skyway Aviation Handling Company followed with a decline of 9.50 per cent to close at N3.05, while Royal Exchange dipped eight per cent to close at 23k per share.
Japaul Oil and Maritime Services lost 7.69 per cent to close at 24k, while Guinness Nigeria shed 7.28 per cent to close at N28 per share.
However, the total volume of shares traded closed lower as investors bought and sold 152.40 million shares, worth N2.44 billion achieved in 3,519 deals.
This was against a turnover of 276.27 million shares valued at N3.71 billion achieved in 3,690 deals on Tuesday.
Transactions in the shares of Guaranty Trust Bank topped the activity chart with 46.05 million shares valued at N1.34 billion.
Zenith Bank followed with 20.71 million shares worth N414.16 million, while UBA traded 11.85 million shares valued at N92.85 million.
FBN Holdings traded 10.52 million shares worth N62.5 million, while Fidelity Bank transacted 5.77 million shares worth N12.48 million.
Meanwhile, a capital market operator, Malam Garba Kurfi, on Wednesday predicted that the Nigerian equities market would witness double digit growth in 2020.
Kurfi, the Managing Director, APT Securities and Funds Ltd., stated this at the Capital Market Correpsondents Association of Nigeria (CAMCAN) first quarter forum in Lagos.
“The All-Share Index is likely going to close for the year 2020 in positive and may close in double digits.
“Both technical analysis and fundamental analysis move to the positive direction,” he said.
Kurfi said that the All-Share Idex was expected to close in double digit by the end of 2020 to repeat 2017 performance due to some monetary policies introduced by the Central Bank of Nigeria (CBN).
According to him, the review of Cash Reserve Ratio (CRR) from 22.50 per cent to 27.50 per cent will redirect funds into the stock market.
Kurfi said that the restriction placed by the apex bank in Open Market Operation and Treasury Bills participation, if sustained, would impact positively on the stock market.
According to him, the Export & Import window of foreign exchange policy should be retained to ensure stability.
He said that the market might experience volatility because of the changes in the reporting financial reports as adopted by the Exchange without adequate awareness of the brokers.
On sectors to watch in 2020, Kurfi said that companies that would benefit from VAT exemption like Nestle would likely declare better profit.
He said that building material companies, such as cement companies, were likely to double their turnover due to early implementation of the budget.
Kurfi said that insurance companies were likely to do better because of the recapitalisation, with some engaging in mergers and acquisitions or takeover.
He said that banks would not perform well when compared with previous years, due to reduction in the bank charges, fees and crash of the interest rate.
On NSE demutualisation, he said that the initiative would unlock and reactivate idle capital and boost activities in the nation’s economy.
Kurfi explained that that demutualisation would reactivate idle capital in the market.
He also said that it would change the perspective and drive more growth for the nation’s economy.
“It is a good thing and all of us are going to happy at the end of the day, because it is going to unlock more capital for the market.
“For instance, if I place shares as collateral, I can trade and make money.
“We are very pleased that this is coming after so much delay; this will change the economy’s perspective as well,” Kurfi said.
Reviewing the past year, Kurfi said that the performance of the market on quarterly basis in 2019, was the worst in the last 10 years, with negative returns in all the quarters.
He attributed the performance to the tense nature of the polity in the build up to the 2019 election that dampened investors’ confidence.