2014: ‘Capital Market Faced Hostilities’

Analysts at Meristem Securities Limited, a dealing member of the Nigerian Stock Exchange have said the Nigerian financial market (equities and fixed Income) experienced a fusion of hostile events in 2014 both in the global and domestic spaces.

According to them, these ranged from the end of U.S Fed’s Quantitative Easing (QE) programme, suspension of the erstwhile CBN governor, the ISIS crisis in the Middle-east, intensified insurgency in North-eastern part of Nigeria, incessant free fall in global oil prices, to pre- election concerns amongst other factors.

They said the Nigerian equities market could not weather the storm, returning -16.13% for the year, unarguably the worst performance post market resurgence in 2012 (market returned 35.45% and 47.19% in 2012 and 2013 respectively). Further reflecting this dire performance, the NSEASI recorded gains for just 75 days in the 248 trading days in the year with a year-high and year-low single trading day performances of 5.01% and -4.07% accordingly.

“Looking forward, we are constrained to take a cue from the array of gains the market recorded towards the end of 2014 (market recorded 18.30% gains in the last 8 trading days of 2014), and the current level of market prices to enticipate a stronger, positive performance in 2015.”

“We also expect that the first half of the 2015 (H1:2015) may mirror the general trend of H2:2014, as risks from political space and declining global oil price still loom large.”

They noted that some stocks were still trading below their justified fundamental value, and offer some gains for discerning investors in the coming year and therefore advised the position of taking for a long term investment horizon as against speculating for short term gains.

Source : Leadership

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