Why Investors Should Quickly Buy These Stocks
By Dipo Olowookere
Retail investors in the Nigerian equities market have been urged to jump into train to take advantage of the low prices some stocks are presently trading.
Giving this advice was Managing Director of APT Securities, Mr Garba Kurfi, in an interview with Vanguard Newspapers.
Mr Kurfi said, “I think the retail investors should take advantage of the market. Most of the stocks are trading in lower Price/Earnings (PE) ratio and when you look at the earnings, most of them are trading at PE (x) ratio of 3.4, which is far below what is obtainable in other frontier markets.
“I think it’s time for the retail investors to take advantage of the market, but most of our local investors don’t play the market until they see the prices rising, therefore allowing foreign investors to take advantage of the market before they move in.”
Speaking on what companies’ stocks investors should consider adding to their portfolios, Mr Kurfi said, “They should look at those companies that are yet to declare their results. Most of the companies have their year-end at December and most of them release their results around March, April and May.
“So, they should take advantage of the earning season so that whatever the companies declare as dividend, they will benefit from it.
“Particularly, I will advise them to look out for the banking sector, especially the ones that have just declared their results.
“They should look at the others that are yet to release their results like Access Bank, United Bank for Africa, they are all in PE ratio that is below five. We have many other stocks that are going to be to the advantage of the market.”
Commenting on why retail investors allow their foreign counterparts to take charge of the market, the APT Securities chief said, “The domestic retail investors do not do much analysis of the market. The foreign investors are the ones that analyse the financials, the earnings, and the dividend yield of quoted companies.”