FINANCIAL PERFORMANCE, LOW PRICED STOCK 'LL DRIVE ACTIVITIES

Analysts have predicted continuous rise in activities in the Nigerian capital market in the next few weeks.The analysts based their prediction on the expected roll out of more corporate performance and results of companies quoted on the Nigerian Stock Exchange.They also stated that another factor that would drive activities in the capital market this month was the fact that most share were selling around their year- lows.

According to them, the current valuation of shares in the equities market remained an attractive factor for investors, adding that this has helped to bring about the increased activities recorded in the market in the last few weeks. In their Weekly Nigerian Capital and Money Market report made available to our correspondent on Tuesday, analysts from FSDH Securities Limited advised investors to be prudent and ensure that they made wise investment decisions. They said, “We maintain that the expected release of full year results and good corporate actions to sustain investor interest in the equities market in the next few weeks. “However, we maintain that investors should hold a medium to long term view in stocks that have good fundamentals in the equities market. In their economic and Financial Market outlook for this year, the analysts had said, “The current attractive valuation of stocks in the equities market would be one of the major drivers of the market in 2012, because usually, investors are attracted to markets with cheap equities, especially those of major stocks. “And so, we believe that the valuation of these stocks would be a major driving factor of the market this year, in addition to other factors such as the improvement in earnings and the possibility of better corporate actions and financial results. The analysts added in the report,that the gradual resolution of the crises that rocked the Nigerian banking industry since 2009 would also help to settle some turbulence and instability witnessed in the market since that period. “We are of the opinion that with the resolution of the banking system crisis and the return of financial sector stability the banking stocks are set for a re-bound. In addition, the current low prices have created additional investment opportunities in the sector,” they added. According to the analysts, the NSE All-Share Index would likely record an appreciation this year, as against the over 16 per cent loss recorded the preceding year. They, however, noted that this to be achieved, other factors had to be stable. They said, “Based on the factors listed above, we are of the view that the NSE ASI can appreciate by about 13.3 per cent in 2012. “Nevertheless, as long as interest rates and yields on fixed income securities remain high, funds will continue to move away from the equities market.”