By Dipo Olowookere
Last year, the Nigerian Stock Exchange (NSE) performed below expectations when compared with its performance in 2017.
There were hopes that things would get better after the first quarter of the year when outcome of the 2019 presidential election would have been known.
But since the general elections were concluded, the local bourse has been on a free-fall despite positive news and corporate earnings.
Even the passage of the 2019 budget, the reappointment of Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, for another five-year term as well as the successful merger of Access Bank and Diamond Bank in March 2019 have all failed to trigger any buying pressure at the market.
Last week, analysts at United Capital Research said despite major bourses across emerging and frontier markets witnessing a positive turnaround relative to 2018 and the performance largely buoyed by the dovish chorus across global central banks, the stock market in Nigeria appears to be missing in action “as a surprise interest rate cut in March, some impressive corporate announcements and a relatively peaceful pre-and post-election period failed to stimulate the market.”
They attributed the major reason for the relatively lacklustre performance by the NSE to “lack of foreign interests, most likely as a result of uncertainties around the current administration as regards the team it will employ to implement its policies.”
United Capital said “inactivity at the primary market segment has continued to make the market less attractive to FPIs.”
It noted that all the above factors are expected to change in H2-19 amid expectations that President Buhari would announce his ministerial cabinet.
“Also, if recent reports are anything to go by, we expect MTN to list on the exchange, to end a long drought of inactivity in the IPO market and provide some depth in the equity market.
“In all, we believe H2-19 is poised with some positive catalysts,” it said.
Adedapo Adesanya