Nigeria stock market outlook for 2017

The Nigerian Stock Exchange (NSE) has had a slow start to 2017, with the NSE All-Share Index little changed compared to the previous day's close. Andrew Tsaku, a trader and financial market analyst at Kapital Care Trust & Securities, joined CNBC Africa to discuss the outlook for stocks this year. Tsaku expressed cautious optimism about the market's performance, citing the global economic growth projections as a positive indicator for Nigeria's economy. He noted that if the economy shows signs of recovery, the stock market is likely to perform better than the previous year. Tsaku mentioned potential IPOs and supplementary listings expected in the market this year, with firms like Med-View Airlines and MTN in the spotlight. However, he emphasized that the success of these listings would depend on market conditions and the readiness of the issuers. Tsaku also addressed the importance of policy-making, particularly the foreign exchange policy of the Central Bank, in shaping the market's performance. He highlighted the need for a clear and predictable exchange rate system to boost investor confidence. Tsaku acknowledged the challenges faced by the Central Bank in balancing monetary and fiscal objectives but suggested that narrowing the exchange rate margins could enhance market stability. Despite declining foreign flows, Tsaku suggested a shift towards self-sufficiency in generating foreign earnings. In terms of market performance, Tsaku forecasted a modest 2-5% improvement in the NSE index for 2017, projecting a positive trend compared to the previous year's closure. The NSE has a historical trend of not finishing lower for four consecutive years, and Tsaku expressed confidence in a positive outcome for the market this year.