By Nkiruka Nnorom
THE Managing Director/CEO of APT Securities and Funds, Mallam Garba Kurfi, has projected that the equities market may record double digit return at the end of this year.
According to him, the benchmark index – the All Share Index (ASI) – is expected to close in double digit by the end of 2020, a repeat of the 2017 performance when the market recorded 42.3 percent positive return and was adjudged one of the best performing exchanges in the world.
He stated that both technical and fundamental analysis move to the positive direction, saying that certain moves by both the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC), especially SEC’s rule that requires stockbrokers to report their liquidity position to both SEC and NSE on monthly basis is yielding positive results and would move the market to a positive close.
Kurfi noted that the restriction placed by apex bank in Open Market Operation and Treasury Bills participation if sustained would impact positively on the stock market.
According to him, the Export & Import window of foreign exchange policy should be retained to ensure stability of foreign.
According to him, the review of Cash Reverse Ratio (CRR) from 22.50 per cent to 27.50 per cent would redirect funds into the stock market.
“However the market may experience volatility because of the changes in the revised reporting of financial statement adopted by the exchange without adequate awareness of the brokers.
“Also, I foresee banks unlikely to make profits like they did in 2019 because they are pressured by the Central Bank of Nigeria (CBN) directive to meet up 65 percent loan-to-deposit-ratio (LDR)”, Kurfi added.
On sectors to watch in 2020, Kurfi explained that Fast Moving Consumer Goods (FMCGs) and building material companies would declare better results this year due to the VAT exemption.