Breaking News

Capital Bancorp projects $48.5 bn external reserves for 2018

Kindly Share This Story:

By Peter Egwuatu

Against the backdrop of the growing economy, Capital Bancorp Plc, an investment firm in the capital market has projected that the country’s external reserves will surpass $48.5 billion in 2019 while the Gross Domestic Product, GDP will grow by 2.2 percent.

The Group Managing Director, Capital Bancorp Plc, Mr. Aigboje Higo yesterday disclosed this in Lagos during the presentation of the company’s Economic Review and Outlook for 2018. He said: “For Nigeria coming from an era of negative growth which was sustained for five quarters and reported first growth in quarter two, Q2 2017 and has grown to 1.4 percent in Q3, 2017, we are of the opinion that if the government rides on the current events, which presently are in the favour of the country, Nigeria will grow by an average of 2.2 percent in 2018 despite downside risks to this growth forecast.”

He noted that the downside risks to the country’s GDP growth include:   sudden decline in oil prices due to increased production from exporting countries; sudden rise in insecurity and insurgency which may disrupt economic activities; improper management and use of foreign reserves which would lead to further depletion and cause foreign exchange, forex volatility.

He said other downside risks include lack of clear and proper fiscal policies to drive different sectors of the economy and the trending patriotic policies by advanced countries that may hamper inflow of both Foreign Direct Investments, FDI and Foreign Portfolios Investments, FPIs even as some advanced countries have reported a rise in interest rates.

Commenting on the current stock market boom in the country, the Capital Bancorp boss stated that it is normal since the economy has continued to maintain growth from recession. “We still expect further bullish market if economic activities continue to improve. The stock market does not work in isolation of the economy. Our market has been experiencing growth across the sub sectors- banking, cement, Fast Moving Consuming Goods, FMCG, insurance etc.  So, we don’t see any bubble burst at the moment because the growth is balanced.

Continuing, he said: “There are speculations no doubt especially when you see some stocks’ prices rising without good fundamentals. We do advise people to be wary of those stocks. Anyway these are the risk that goes in the market. These speculators may gain or loss from these stocks. Everything will depend on the full year results that the market is expecting. If the result of these companies turns out to be good, then the price would be sustained but if the reverse becomes the case then you will see people losing money.”

He expressed optimism of further decline in interest rates coming down before the end of first half of this year, saying “interest rates gradually drops as government borrowings lessens due to rising revenue”.

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!