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Nigeria stock market extends gains third day running
The Nigeria Stock Exchange All Share Index extended its gains for the third consecutive session today despite the gloom in the economy.
Wed, 17 Aug 2016 13:57:41 GMT
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AI Generated Summary
- The Nigeria Stock Exchange All Share Index has shown resilience by extending gains for the third consecutive session, despite ongoing challenges in the economy.
- Investors are concerned about the liquidity of the forex market and the devaluation of the Naira, which are impacting the equity market's performance.
- Analysts emphasize the importance of thorough analysis and cautious decision-making in light of varied performances among companies like GT Bank and PZ Customs.
The Nigeria Stock Exchange All Share Index extended its gains for the third consecutive session today, despite challenges in the economy. Rotimi Fakayejo, Managing Director of Enterprise Capital Partners, provided insights from the trading floor. Despite the market's upward trend, concerns persist regarding the forex market's liquidity and the depreciation of the Naira. Fakayejo highlighted the need for improved liquidity in the forex market to generate interest in the equity market. He criticized the inconsistent policies that hinder market stability and suggested that it would take time for the equity market to strengthen. Fakayejo also discussed the recent performance of GT Bank, emphasizing the importance of analyzing figures beyond the bottom line. While GT Bank reported a 45% increase in profit after tax, Fakayejo noted significant loan impairment charges that impacted the final figures. He observed a trend of investors conducting thorough analysis before making decisions, indicating a growing level of prudence in the market. On the other hand, Fakayejo addressed the challenges faced by companies like PZ Customs, which reported a notable decline in profits. Despite the company's efforts to provide dividends, Fakayejo expressed concerns about holding onto such stocks amidst economic uncertainties. He emphasized the need for stocks to reflect inflation and currency devaluation rates, suggesting that prices should adjust upward accordingly. When asked about his top picks in the current market, Fakayejo recommended consumer goods companies like Jumia and industrial giants such as Dangote Cement, while adopting a cautious approach towards bank sector stocks. In conclusion, Fakayejo pointed out the complex landscape for investors in Nigeria's stock market, urging careful consideration and strategic decision-making in the face of economic challenges.