By NKIRUKA NNOROM
Shares of companies listed on the consumer goods and banking sectors of the Nigerian Stock Exchange will continue to lead activity in the market within the year, analysts at Vetiva Capital have said.
They noted that their projection stemmed from investors’ preference and patronage of stocks in those sectors, saying, “The stocks market rose to a 32-month high on last week, ending the year up by 34 percent in the index’s best performance since 2007, led by growth in the consumer goods and banking sectors which is expected to continue next year.
“With continued interest in financials and consumer goods, we expect the market to extend gains into the New Year with banks leading the charge.”
The index of top-10 consumer goods stocks ended up 41.3 percent to become the best performing sector while banking stocks finished up 21 percent in the previous year.
On the analysis of events that shaped the stock’s market in the previous week, the analysts explained that stocks rose by 0.76 percent to cross a 28,000 point psychological level and closed the year at 28,079 points, a level last seen in April 2010. The movement, according to them, effectively made the NSE index the second best performing index in sub-Saharan Africa after Uganda.
Meanwhile, analysts at FSDH said that the rally recorded last year where the index returned over 26 percent would attract more local investors within the year.
They noted that the equities market could prove to be a worthwhile investment window following a low rate regime currently being experienced in government securities. “Investor confidence has gradually been restored with the impressive market return in 2012, which could lead to increased participation and opportunities going forward,” they stated, adding “investors are advised to consider investment opportunities in the under listed stocks, as they have good fundamentals that can generate good returns in the medium to long- term.”
On their part, analysts at BGL Limited said the current market development surmounts the usual tight liquidity trend of the early periods in the year which takes its toll in January as notable stocks closed on bid.
“There was an all-round growth across sectors on the local bourse while the NSE-30 comprising of large capped stocks gained significantly. We however suggest that investors should act fast with their buy mandates not to be left out in the market rally, “they said.