By United Capital Research
March proved to be a month of “surprise” after the Nigerian equity market failed to recover in the wake of the Presidential and National Assembly elections.
For better perspective, the market ended 2018 lower by a whopping 17.8 percent amid a seastorm of negatives; from tighter financial conditions (higher US interest rates and a stronger dollar) to political uncertainties in anticipation of what was expected to be the most unpredictable presidential contest.
However, with all of 2018’s pressure points behind us, investors are clearly still having a hard look at the equity market considering the massive turnover at the I & E window post-elections that eluded this segment of the market.
On one hand, we do not expect equities to continue to weaken unless fundamentals move in an unfavourable direction.
On the other hand, even though the market is clearly mispriced on both a fundamental and technical perspective, a nearterm recovery in equities would only be spurred by a catalyst; some of the near-term triggers we are looking out for include: MTN’s expected listing in H1-19, as well as favourable oil price trends.
Until when these events materialize, sentiments could continue to remain choppy.
