Capital Bancorp Rates Economy, Stocks High This Year
Capital Bancorp Plc has predicted a bullish year for the Nigerian stock market and the economy at large, given the current positive indicators in the macroeconomic environment.
The frontline capital market operator with about 30-year presence in the market space, gave the insight in its special 70-page report dubbed, ‘Economic Review and Outlook for 2018’. The report has been formally released to the financial press.
The company also highlighted some headwinds that could moderate the economy as well as market performance in the year if not managed.
The company’s Managing Director, Mr. Higo Aigboje, while addressing the media in Lagos on Tuesday, said the current price of oil and volume currently being produced in the economy as well as efforts of the current government targeted at diversifying the economy’s revenue base via improved taxation and massive agricultural development, were strong economic impetus.
He also said the performance boosters of The Exchange for the year were: stability of oil prices; effective management and improved liquidity of the foreign exchange market; improvement on corporate earnings; significant focus on the non-oil sector to increase output and lower interest rate regime.
Aigboje said, “This will be driven by effective synergy in the use of fiscal and monetary policies, government’s focus on the real sector of the economy, improved market participation by local investors and domestic institutional investors, efficient regulation of the market by the Securities and Exchange Commission and the Nigerian Stock Exchange.
“Others are passage of the Petroleum Industry Bill, unbundling of the Nigerian National Petroleum Corporation and listing of resultant companies and deliberate efforts aimed at encouraging more listings on the Exchange by companies in the telecoms, power generation and distribution spaces, among others.”
Aigboje, however, explained that issues such as sudden rise in insecurity as a result of the planned general elections, could cause some sort of political instability, thus triggering the exit of the Foreign Portfolio Investors, adding that, “Sudden reversal in oil prices, an upturn in the yields of fixed income securities and failure in the banking sector may trigger a sell-off and cause further damage to the entire stock market.”
According to him, the company’s review of the global and Nigerian financial markets was designed to serve as a compass for both indigenous and foreign investors as is as potential investors.
By the review’s executive summary which was presented by the company’s Chief Analyst, Mr. Victor Chiazor, Capital Bancorp forecast that the global economic growth would hit 3.5 per cent this year as against 3.1 per cent last year.
“ With ample opportunities in some stocks in the banking sector and the consumer goods sector of the equities market , we have projected a 25 per cent return for the Nigerian stock market in 2018, though downward risks to achieving this target remain visible,”Chiazor said.
Speaking on Bancorp e-Trade, Aigboje noted that it was a high-technological innovation aimed at promoting financial inclusion in Nigeria.
According to him, the product allows an investor to trade online in the stock market and it is being upgraded for additional uses.