By NKIRUKA NNOROM

The Nigerian capital market will see improved activities in the second half (H2) of the year as a result of interim  dividends expected to be declared by blue chip companies.

In a review of the capital market activities for the first half(H1) of the year, 2013 and outlook for third and fourth quarter, Cowry Assets Management Limited, said that positive expectations from 2013 year end results would also be an added boost.

“We retain our bullish outlook for the equities market in H2 2013 as the bourse present attractive opportunities for both foreign and local participants; Expectations from interim dividend declaration by blue chips such as Nestle, Guaranty Trust Bank, Okomu Oil Palm Company will keep the tempo upbeat in second half of the year.

“Also, investors’ positioning ahead for year 2013 end results will drive the market northward in Q3 and Q4 2013,” the company said in the review.

It, however, stated that the capital inflows of Foreign Portfolio Investments, FPIs might be curbed if quantitative easing was effectively halted as planned by the United States.

On the bonds market, the report stated that primary segment of the market was expected to be auctioned at higher discounts given higher expectations of both interest rates and decline  in  foreign portfolio inflows.

It added that the establishment of the self regulating FMDQ OTC Plc, for the hitherto unregulated OTC bonds market, expected to commence operation in August, would foster improvement in the OTC bond market, as well as boost confidence in the entire bond market, saying, ‘Hence, we anticipate higher volumes of transactions in the bond space.’

The equities market was bullish in most parts of six months of the year, culminating in a year-to-date high of 40,012.66 basis points and N12.85 trillion for the NSE All Share Index, ASI, and market capitalisation respectively.

Cowry Asset Management attributed the positive performance during the period to large capital inflows from foreign investors’ patronage enjoyed by the Exchange.

“In the months of January and February, FPIs scrambled for opportunities in the emerging market space and the Nigerian stock market positioned herself as a choice investment destination.

Consequently, the NSE ASI appreciated by 17.79 percent as at the end of February. The bulls run was sustained in March, albeit, mild as the benchmark index, NSE ASI, advanced by 1.39 percent in the month as investors took a breather to cash in on accumulated gains.“Also, sustained profit taking ensured that the market closed lower in April with the ASI retreating by 0.29 percent.

Following a temporal price correction post result season, bargain hunting assumed the center stage in May. However, the announcement by the United States Federal Reserve Bank to reduce ‘Quantitative Easing’ in early June sparked a bearish run driven by the gradual funds pull out by foreign participants, culminating a total market decline of N648.97 billion in the month of June.

“Despite the sell pressure faced by the NSE in the last trading month of first half of  2013, previous months of impressive bull run, helped lift the equities benchmark index, ASI rising significantly by 28.80 percent year-to-date as against 4.19 percent recorded in first half of 2012. In the same vein, market capitalization grew by 27.32 percent or N2.45 trillion compared to a growth of 5.55 percent or N362.71 billion in the same period of 2012.”