2019: Investors predict bountiful yields in stocks

COMFORT EKELEME, Asst. Business Editor

The year 2018 may have come and gone but the performances of the nation’s capital market will remain memorable in the minds of investors who lost trillions of naira due to repeated nosediving in the fortunes of the market.

The stock market which recorded growth in the first three month of 2018 closed the year in a negative trend, declining by N1.889 trillion.

Similarly, the market which opened the year with huge international attention saw investors bled in red due to several loss in in their investments, which analysts said it not good for any economy. Investors lost this huge amount of monies because the shares listed did not do well within the year.Also, Within the year under review, the Nigerian Stock Exchange (NSE) trading result showed that market capitalisation of listed equities depreciated by 13.9 per cent to N11. 720 trillion.

Similarly, the NSE All Share index depreciated by 6812.69 basis point or 17.81 per cent to close the year at 31430.50 points.
Although the market appears not to have performed well in 2018, some investors in the capital market believe that the stock market has a bright future in 2019 if only the regulators becomes more proactive and with a fair and credible elections that would bring in better economic managers.

An analysis of the transactions for the period showed that the Stock Market appreciated by N1.383 trillion in the first quarter to close at N14.992 trillion from N13.609 trillion it opened for the year.Also, the NSE All Share Index appreciated by 3261.32 basis points or 8.54 per cent to 41504.51 points from 38243.19 traded in December 31, 2017.

Trading activities took different direction at the end of second quarter as the price of equities close south ward, dropping by 3225.96 basis point or 7.77 per cent to 38278.55 points while market capitalisation of listed equities sheds N1.126 trillion to close at N13.866 trillion.The downward trend continued in the third quarter as ASI failing by 5512.18 basis points or 16.82 per cent to 32766.37 points while market cap went down by N1.904 trillion or 15.92 per cent to close at N11.962 trillion.

The market sustained negative trend in the fourth quarter of the year as investors lost N242 billion or 2.02 per cent to close at N11.720 trillion while ASI down by 1335.87 basis points or 4.07 per cent to 31430.50 points.Acting Director, Securities and Exchange Commision (SEC), Mary Uduk while giving the reasons why the market has not performed well in recent times said that a large percentage of those who do business in our market are foreign investors.

According to her, as at the third quarter of 2018, the capital outflow stood at N513 billion as against N477.7 billion incoming. ‘We can see the impact of increase in interest rate in advance countries not just in the US, has impact on capital outflow thereby leading to reduced performance in our markets.

‘I want to say that interest rate increase in advanced economies, not just the US, does not affect not only Nigeria but also affects other emerging and frontiers market in the world.Although investors maintained that some of the companies quoted on the floor of the Nigerian Stock Exchange (NSE) perform well within the year, posting impressive results but that did not reflect on the equities.

They added that the regulators contributed to the problems faced by investors in this market in the 2018 financial year.
However, shareholders are optimistic that the market which closed the year on a negative trend can rebound in 2019 if the country witness a free and fair elections with a credible leader who understands what it takes to drive the economy of the nation forward.
This is even as they linked attitude of the regulators to the poor performance of the market within the year under review and called for overhauling of the capital market regulators, while stressing the need to constitute the board of the Securities and Exchange Commission (SEC) for better performance of the commission in the 2019 financial year.

Speaking with Daily Champion, National President, Progressive Shareholders Association Of Nigeria (PSAN) Boniface Okezie maintained that the nigerian capital market did not perform well in 2018 and this has not been to the best interest of investors.According to him, Investors have lost trillions of naira in the capital market in 2018. ‘To me, this is the worst year ever recorded in the history of the Nigerian capital market in terms of performance.

‘The market continued to nose diving, even when it appears it is rebounding, it will continue to nosedive. Unfortunately, some of the companies operating in the market have continued to perform well, posting impressive results but the regulators has been the problem we are facing in this market. There is need to overhaul the regulatory system, the government needs to take a look again on the regulators.
‘The companies listed on the exchange have been doing very well, unfortunately, most of the interim and final dividends posted by the banks have not reflected on the equities, that goes further to prove that the problems we are having is not from the operators but the regulators.

Speaking further, Okezie stated that ‘in terms of capital appreciation, the listed companies were not getting it, in terms of dividends, they have been getting it a little which is good for investors. The companies have been doing well.On his projection for the market in 2019, he said until we have a free and fair election and choose leaders who would be able to guide the economy, the market may still not do well.

He said, when the economy is doing well, the market will feel the impact. So until another President emerges and assemble his economic team, people who can drive the economy, it is then that we can see the market rebound. ‘Otherwise, if we continue the way we are today, i don’t see any rebound in the market.

‘Even the foreigners are pulling out, waiting for us to conclude the elections, until that is done, we won’t see any positive impact in the market. The free and fair polls will guarantee market rebound and hope for investors in the market. Confidence return will be based on credible elections and credible candidate who has the capacity to drive the economy of this nation. As long as the economy remains in bad shape, the capital market will never rebound’, he said.

Also speaking, National President, Constance Shareholders Association of Nigeria , Alhaji Shehu Mikail said the investors are not happy with the performance of the market in 2018, adding that the poor performance was due to non challant attitude on the part of the regulators.

In his view, a shareholder activists, Olatokunbo Gbadebo maintained that the number of companies that visited the NSE for listing was an improvement for the market.

According to him, if you look at it critically, nigerian investors did not loose anything, typical nigerian investor believe in long term investment.

He recalled that the nigerian economy just exited recession ‘and since we moved out of recession, so many companies approached the capital market, either for right issue or public offer and that did not happen in the previous year, so it is an improvement.
‘And I am quit sure it would go in that direction, the point is that we look too much at foreign investors and most of the analysis were based on them because is gave the stock brokers opportunities to make more monies than what it was in the previous year.

‘Portfolio investors are the once speculating, a typical analysis of nigerian investors shows that we don’t speculate much, when you look at the figures, it looks as if the market nosedived, no. Nigerian investors only sell when they are in difficulty, but there are people that just buy, upload when they can make some gains and you cant blame them because it is part if the capital market. But you don’t use that to determine what investors lost, If you look at it logically, we didn’t lose anything, if you ask me if i lost anything in the market, I will tell you no.

‘Local investors didn’t lose anything, these are the areas our analysts, experts don’t look at. If i am a speculator, i will not be talking the way i am talking now. Typical nigerian investors believe in long term investment and we don’t speculate on our stocks.
‘People want the economy to fly, it can’t fly, it has to be gradual, definitely the capital market has a bright future in 2019 because there are some companies waiting for the end of the year for the market to balance for them to come to the market’, he maintained.
Advising local investor, he said there is need for them to pick their rights from the companies approaching the market, while saying there is need for the regulators to be more proactive on issues concerning quoted companies, as they have the right to see the books of companies.

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